The focus of the current study is to understand which unique features of an immersive virtual reality environment have the potential to improve learning relative motion concepts. Thirty-seven undergraduate students learned relative motion concepts using computer simulation either in immersive virtual environment (IVE) or non-immersive desktop virtual environment (DVE) conditions. Our results show that after the simulation activities, both IVE and DVE groups exhibited a significant shift toward a scientific understanding in their conceptual models and epistemological beliefs about the nature of relative motion, and also a significant improvement on relative motion problem-solving tests. In addition, we analyzed students' performance on one-dimensional and two-dimensional questions in the relative motion problem-solving test separately and found that after training in the simulation, the IVE group performed significantly better than the DVE group on solving two-dimensional relative motion problems. We suggest that egocentric encoding of the scene in IVE (where the learner constitutes a part of a scene they are immersed in), as compared to allocentric encoding on a computer screen in DVE (where the learner is looking at the scene from "outside"), is more beneficial than DVE for studying more complex (two-dimensional) relative motion problems. Overall, our findings suggest that such aspects of virtual realities as immersivity, first-hand experience, and the possibility of changing different frames of reference can facilitate understanding abstract scientific phenomena and help in displacing intuitive misconceptions with more accurate mental models.