Virtual reality-based neuropsychological assessments proffer the potential to address the limited ecological validity of pen-and-paper measures of memory. To investigate the construct validity of a newly developed virtual reality measure of memory, the Virtual Environment Grocery Store (VEGS), traditional neuropsychological measures of memory and executive functioning were administered to 48 older adults and 55 young adults. Performances on the VEGS memory tasks and the traditional neuropsychological assessments of memory were positively correlated, indicating that memory for VEGS content was similar to memory for traditional paper-and-pencil measures. The older adults performed significantly worse than young adults on the VEGS and the California Verbal Learning Test, but the DKEFS Color-Word Interference failed to differentiate the groups. Furthermore, significant differences were found between groups for the VEGS memory and multitasking measures. The VEGS has the advantage over traditional measures of providing objective measurement of individual components of memory in simulations of everyday activities.