This research investigates the design of a low-cost 3D spatial interaction approach using the Wii Remote for immersive Head-Mounted Display (HMD) virtual reality. Current virtual reality applications that incorporate the Wii Remote are either desktop virtual reality applications or systems that use large screen displays. However, the requirements for an HMD virtual reality system differ from such systems. This is mainly because in HMD virtual reality, the display screen does not remain at a fixed location. The user views the virtual environment through display screens that are in front of the user’s eyes and when the user moves his/her head, these screens move as well. This means that the display has to be updated in realtime based on where the user is currently looking. Normal usage of the Wii Remote requires the controller to be pointed in a certain direction, typically towards the display. This is too restrictive for HMD virtual reality systems that ideally require the user to be able to turn around in the virtual environment. Previous work proposed a design to achieve this, however it suffered from a number of drawbacks. The aim of this study is to look into a suitable method of using the Wii Remote for 3D interaction in a space around the user for HMD virtual reality. This paper presents an overview of issues that had to be considered, the system design as well as experimental results.