This paper describes the conceptual design of a virtual reality-based stress management training tool and evaluation of the initial prototype in a pilot efficacy study. Performance Edge virtual-reality (VR) was co-developed with the Australian Defence Force (ADF) to address the need for practical stress management training for ADF personnel. The VR application is biofeedback-enabled and contains key stress management techniques derived from acceptance and commitment and cognitive behavioural therapy in a modular framework. End-user-provided feedback on usability, design, and user experience was positive, and particularly complimentary of the respiratory biofeedback functionality. Training of controlled breathing delivered across 3 sessions increased participants' self-reported use of breath control in everyday life and progressively improved controlled breathing skills (objectively assessed as a reduction in breathing rate and variability). Thus the data show that a biofeedback-enabled controlled breathing protocol delivered through Performance Edge VR can produce both behaviour change and objective improvement in breathing metrics. These results confirm the validity of Performance Edge VR platform, and its Controlled Breathing module, as a novel approach to tailoring VR-based applications to train stress management skills in a workplace setting.