A system and method are described for generating an interactive preview for an IoT device. For example, one embodiment of a system comprises: an Internet of Things (IoT) development application comprising a graphical user interface (GUI) through which a user is to specify a configuration for a new IoT device, the development application including a preview GUI component to allow a user to render a mobile UI preview on a mobile client; an IoT service including virtual device generation logic to generate a virtual device responsive to the configuration specified for the new IoT device, the virtual device comprising a virtualized representation of the new IoT device; and the virtual device to establish a communication channel with a mobile app executed on a client, the virtual device to dynamically communicate updates to the mobile app as the user makes changes to IoT device attributes and/or presentation definitions from the preview GUI.