BACKGROUND: Traditional methods for assessing memory are expensive and have high administrative costs. Memory assessment is important for establishing cognitive impairment in cases such as detecting dementia in older adults. Virtual reality (VR) technology can assist in establishing better quality outcome in such crucial screening by supporting the well-being of individuals and offering them an engaging, cognitively challenging task that is not stressful. However, unmet user needs can compromise the validity of the outcome. Therefore, screening technology for older adults must address their specific design and usability requirements. OBJECTIVE: This study aimed to design and evaluate the feasibility of an immersive VR platform to assess spatial navigation memory in older adults and establish its compatibility by comparing the outcome to a standard screening platform on a personal computer (PC). METHODS: VR-CogAssess is a platform integrating an Oculus Rift head-mounted display and immersive photorealistic imagery. In a pilot study with healthy older adults (N=42; mean age 73.22 years, SD 9.26), a landmark recall test was conducted, and assessment on the VR-CogAssess was compared against a standard PC (SPC) setup. RESULTS: Results showed that participants in VR were significantly more engaged (P=.003), achieved higher landmark recall scores (P=.004), made less navigational mistakes (P=.04), and reported a higher level of presence (P=.002) than those in SPC setup. In addition, participants in VR indicated no significantly higher stress than SPC setup (P=.87). CONCLUSIONS: The study findings suggest immersive VR is feasible and compatible with SPC counterpart for spatial navigation memory assessment. The study provides a set of design guidelines for creating similar platforms in the future.