More and more cities are evolving into smart cities, increasing their attractiveness, energy efficiency, and users’ satisfaction. Lighting systems play an important role in the evolution process, thanks to their ability to affect city life at night along with people’s mood and behaviour. In this scenario, advanced lighting design methods such as virtual reality (VR) became essential to assess lighting systems from different points of view, especially those linked with the city users’ expectations. Initially, the review highlights a list of objective and subjective parameters to be considered for the lighting design of three main city areas/applications: roads, green areas and buildings. Besides, the state-of-art in using VR for outdoor lighting design is established. Finally, the Unreal game engine is used to analyse the ability of VR to take into account the lighting parameters, not yet investigated in current literature and to highlight the VR potential for augmenting lighting design. The results confirm the benefit of using VR in lighting design, even if further investigations are needed to establish its reliability, especially from the photometrical point of view.