The continuous spread of the COVID-19 pandemic is causing people to feel anxiety and stress. This study constructs a four-layer research model to examine how a 360° virtual tour can reduce people's psychological stress through two types of presence (the sense of presence and telepresence) and affective-motivational states (enjoyment and involvement) in this extraordinary period of the COVID-19 pandemic. In order to test the moderating effect of involvement, partial least squares (PLS) analysis is employed to analyse valid data collected from 235 individuals. The results of this study indicate that telepresence has a higher impact in generating affective-motivational states than the sense of presence. Among the factors, enjoyment shows the highest effect on satisfaction with the 360° virtual tour experience and stress reduction; involvement moderates the effect of telepresence on satisfaction with the 360° virtual tour experience. This study also contributes to virtual reality research by distinguishing the concepts of ‘sense of presence’ and ‘telepresence’ as well as demonstrating the mechanisms whereby virtual reality technology influences people's psychological well-being. Timely recommendations are provided for people in order to reduce psychological stress during and after COVID-19 pandemic. •Sense of presence and telepresence influence affective-motivational states.•Telepresence has the highest total effect on the satisfaction with the 360° VR tour.•Telepresence has the highest total effect on stress reduction.•Involvement mediates and moderates the effect of telepresence on the satisfaction.