Multisensory integration is critical for supporting human spatial perception as we move around our environment. In this study, we used a modern head-mounted display (HMD) as a tool for studying the effects of visual-vestibular conflict on human spatial perception, feelings of presence and cybersickness in virtual reality (VR). Thirty participants were recruited and exposed to different levels of sensory conflict as they moved their heads in pitch. This sensory conflict was generated by artificially delaying updates to the visual representations of their virtual environment. On each trial we measured our participants': 1) perceived scene instability using an angular gauge figure task; 2) spatial presence using a subjective rating scale, and 3) cybersickness severity using the fast motion sickness (FMS) scale. As display lag was increased, perceived scene instability and cybersickness were both found to increase, whereas reported presence decreased. Importantly, the difference in the participant's virtual and physical head orientation (DVP) for the trial was also found to predict reported scene instability and cybersickness. Faster head rotations (at 1.0 Hz compared with 0.5 Hz) amplified both of these adverse effects (presumably due to the increase in DVP). These findings are consistent with the view that measurable low-level visual-vestibular conflicts can account for the cybersickness experienced during HMD VR.