The purpose of this research study was to explore the impact of virtual character design on user emotional experience and user behavior in a simulated environment. With simulation training increasing in popularity as a tool for teaching social skills, it is essential that social interactions in virtual environments provide authentic opportunities for practice (Swartout et al., 2006). This study used Interactive Performance Theory (Wirth, 2012) to examine the effect of designing a virtual buddy character with ineffective traits instead of effective or expert traits. The sample population for this study (n = 145) consisted of first year university students enrolled in courses in the fall of 2013 at the University of Central Florida. Data on participant emotional experience and behavior were collected through questionnaires, researcher observations, and physiological signal recording that included participant heart rate and galvanic skin response. Data were analyzed using multivariate analysis of variances (MANOVA), Kruskal-Wallis one-way analysis of variance, and qualitative thematic coding of participant verbal behavior and written responses. Results of the analysis revealed that participants who interacted with an ineffective virtual buddy character had statistically significant higher averages of verbal statements to the antagonist in the simulated environment and statistically significant lower perceptions of antagonist amiability than participants who interacted with an effective virtual buddy. Additionally, participants who interacted with a virtual buddy of the opposite gender gave statistically significant higher ecological validity scores to the simulated environment than participants who interacted with a virtual buddy of the same gender. Qualitative analysis also revealed that participants tended to describe the female buddy character with more ineffective traits than the male buddy character even though effective and ineffective design conditions were equally divided for both groups. Further research should be conducted on the effect of virtual buddy character design in different types of simulation environments and with different target audiences.