Two important cognitive activities involved in designing in virtual environments are explored in this chapter. The first activity is design representation that is mentally created during the design processes. In virtual environments, particularly the full-scale immersive virtual reality settings, the nature of representation applied to design generation is different from the one applied in the conventional design environments such as pencil-and-paper or physical model-making mode. The second activity relates to human perception, which has not been changed by high-tech developments. Perception in virtual environments provides information to allow designers to understand the environmental impact generated from design. Additional knowledge of media applications and their corresponding representations has created new definitions of identity and privacy, which also has created interesting design impacts, subtle cultural effects, and social interactions. These phenomena are described through examples in this chapter.