Virtual reality is more than just a close model of a virtual world. Virtual reality focuses on the human senses while someone navigates the virtual space. The purpose of this project thesis is to initially create an interactive audio/visual/haptic virtual world and to study the physically motivated sound synthesis. For this purpose a number of tools were examined and used; such as dynamic phenomena modelling libraries and libraries of sound and haptic interactions. In addition to this, a haptic interaction device and a head mounted VR display were used. An interactive application was developed in which users are able to haptically interact with a xylophone and create sounds that are coming from pre-recorded samples.