A haptic interface is a kinesthetic link between a human operator and a virtual environment. This paper addresses stability and performance issues associated with haptic interaction. It generalizes and extends the concept of a virtual coupling network, an artificial connection between a haptic display and a virtual world, to include both the impedance and admittance models of haptic interaction. A benchmark example exposes an important duality between these two cases. Linear circuit theory is used to develop necessary and sufficient conditions for the stability of a haptic simulation, assuming the human operator and virtual environment are passive. These equations lead to an explicit design procedure for virtual coupling networks which give maximum performance while guaranteeing stability. By decoupling the haptic display control problem from the design of virtual environments, the use of a virtual coupling network frees the developer of haptic-enabled virtual reality models from issues of mechanical stability.