Purpose: The purpose of this study was to assess the effects of virtual reality-based continuous slow exercise on muscle strength and dynamic balance capacity, in older adults over 65 years of age. Methods: Twenty-six volunteers were randomly divided into two groups; a Virtual Reality (VR) exercise-group ($67.8{pm}4.1$ yrs) and a Control group ($65.5{pm}5.2$ yrs). The VR group participated in eight weeks of virtual reality exercise, utilizing modified Tai-Chi provided by a motion capture system, and the Control group had no intervention. The hip muscle strength and dynamic balance of the members of both the VR group and the Control group were measured at pre- and post-intervention, using a multimodal dynamometer, and backward stepping test, respectively. Results: 1. After the 8-week VR-based exercise, the VR group showed significant improvement of hip strength, compared to the control group: hip extension (p=0.00), flexion (p=0.00), abduction (p=0.00), and adduction (p=0.00). 2. After the 8-week VR-based exercise, the VR group showed significant improvement of dynamic balance capacity as ground reaction force, compared to the control group. Eyes opened backward stepping test: Fx (+) (p=0.00), Fy (-) (p=0.02), Ver (+) (p=0.02) direction. Eyes closed backward stepping test: Fx (+) (p=0.04), Fy (-) (p=0.04), Ver (+) (p=0.03) direction. Conclusion: The VR group showed improvement of their hip muscle strength, and dynamic balance capacity. Therefore VR-based continuous slow exercise would contribute to reducing the risk of falls in the elderly.