Students involved in the architecture, engineering and construction disciplines are often faced with the challenge of visualizing and understanding the complex spatial and temporal relationships involved in designing three-dimensional structures. A difficulty inherent in engineering education lies in teaching students decision-making skills, the logic of project management concepts, and the related risks involved in executing complex engineering projects. An evolving body of research applies the use of educational computer simulations to enhance student learning experiences through testing real-world scenarios to aid the development of student decision-making skills. This paper introduces ongoing research at The Pennsylvania State University aimed at improving engineering education in building and construction through interactive construction project learning applications in an immersive virtual reality environment. This research focuses on challenges in understanding and creating construction schedules. The construction industry increasingly employs 4D CAD models for detailed schedule reviews, but commercial applications currently used for creating these 4D models are often inadequate for construction engineering education due to their inability to concurrently create and review schedules. This paper describes the development of a first and second generation Virtual Construction Simulator (VCS), a tool that enables students to create and review construction schedules simultaneously through 3D model interaction. The educational value and utility of the VCS was assessed through surveys, focused group interviews, and a student exercise conducted in a construction management class at Penn State. The results revealed the overall value of the VCS as an effective 4D model creation and schedule review application that fosters collaborative work and greater task focus. In addition, this paper also discusses further development of the VCS educational simulation tool and future research.