Previous research has shown that even low end-to-end latency can have adverse effects on performance in virtual environments (VE). This paper reports on an experiment investigating the effect of latency on other metrics of VE effectiveness: physiological response, simulator sickness, and self-reported sense of presence. The VE used in the study includes two rooms: the first is normal and non-threatening; the second is designed to evoke a fear/stress response. Participants were assigned to either a low latency (~50 ms) or high latency (~90 ms) group. Participants in the low latency condition had a higher self-reported sense of presence and a statistically higher change in heart rate between the two rooms than did those in the high latency condition. There were no significant relationships between latency and simulator sickness