Virtual environments (VEs) are interactive computer simulations that immerse users in an alternate reality. Distributed VE (DVE) applications simulate the experience of real-time interaction among multiple users in a shared three-dimensional (3-D) virtual world. In this paper, we identify the network service requirements for highly interactive DVEs and show the limitations of IPv4 in satisfying them. We propose a transport system for DVE applications, which incorporates a scalable network architecture and dynamic QoS adaptation over IPv6. The network communication architecture combines the advantages of anycasting, unicasting and multicasting while the dynamic QoS adaptation assists the DVE applications in adapting to fluctuations in the network. The network-specific issues are hidden from the application by means of a networking module. The traffic measurements are performed on a DVE application using the proposed architecture.