The world is becoming increasingly virtual. Since the invention of the World Wide Web, information and human interaction has been transferring to the web at a rapid rate. Education is one of the many institutions that is taking advantage of accessing large numbers of people globally through computers. While this can be a simpler task for disciplines focusing on lecture-based learning, it has been a challenge for the field of design. Transferring its studio-based education structure, where students draw, build, collaborate, test and iterate their work, requires using technologies outside of the common ones in information-based disciplines. This literature review analyses the current tools used in online design education and an alternative technology, called multi-user virtual environments (MUVE). Addressing MUVE's technological features, limitations and use in education, this paper proposes that a synergy between MUVE and online design education would be mutually beneficial.