A head-mounted display assembly with a headphone retention mechanism. The head-mounted display assembly includes a display housing, a headphone assembly, a headphone storage region located on the body of the display housing, and a headphone retention mechanism at the headphone storage region. The headphone retention mechanism includes a magnetic element configured to produce a magnetic field that releasably retains the headphone assembly against the headphone storage region when a user positions the headphone assembly in the vicinity of the headphone storage region.