Combination of logic-based artificial intelligence with virtual reality in intelligent agent systems is an approach not extensively sought after to date. It is our belief that significant gain is to be expected if the technical challenges involved are overcome. In this paper, we describe the mVlTAL intelligent agent system, which is our latest effort towards this direction. The system is a contemporary intelligent agent system with applications in numerous areas, including intelligent virtual environments and formal artificial intelligence research. The system focuses largely on logic-based approaches, which are present in almost every aspect of it, including modeling, knowledge representation, definition of agent behaviors and inter-agent communication. In addition, virtual manifestation of the world and agents is also an inherent characteristic of the system. The system, even if still in a development and evaluation stage, has already been employed in experimental and educational applications, demonstrating the potential benefits of such an approach.