Virtual reality (VR) distraction has successfully decreased chronic and acute pain perception in clinical and experimental settings, but the precise elements of VR that optimize distraction have not been fully explored. Research has suggested that increasing "presence" can diminish pain reports. The current literature has used head mounted displays (HMD) to increase presence, but HMDs are costly and their effects on pain and presence are inconclusive across VR studies. Mood induction with a VR could be a more effective, inexpensive way to increase presence and optimize VR distraction benefits. The first study developed and tested the validity of four experimental VR mood induction conditions manipulating emotional valence and arousal, and examined the effect of the four conditions on heart rate and heart rate variability. Self-report ratings of valence and arousal showed the conditions induced the intended emotions. There were no differences in heart rate measures across the conditions. The second study compared pain intensity and unpleasantness ratings across the four VR conditions and a baseline control. There were no differences in pain intensity ratings, but there were significant differences in pain unpleasantness ratings across conditions. A calm background environment seemed to have the most beneficial effect on pain unpleasantness. Possible methods and protocols to increase pain intensity measurement validity are discussed.