A system and method for operating a head mounted display (HMD) is provided. The HMD has a head attachment portion and a viewing module coupled to the head attachment portion. The viewing module includes an inner side having a view port into a screen configuring for rendering a virtual reality scene and an exterior housing. A communications module for exchanging data with a computer system is provided and the computer system is configured to generate the virtual reality scene for the screen. A depth camera is integrated into the viewing module and is oriented to capture depth data of an environment in front of the exterior housing. One method includes processing, by the computer system, the depth data captured by the depth camera to identify hands of a user wearing the HMD in the environment. The hands are rendered into the virtual reality scene. The hands are tracked such that movements of the hands appear as movements of virtual hands extending into the virtual reality scene.