The present invention relates to a system and method for capturing video of a real-world scene over a field of view that may exceed the field of view of a user, manipulating the captured video, and then stereoscopically displaying the manipulated image to the user in a head mounted display to create a virtual environment having length, width, and depth in the image. By capturing and manipulating video for a field of view that exceeds the field of view of the user, the system and method can quickly respond to movement by the user to update the display allowing the user to look and pan around, i.e., navigate, inside the three-dimensional virtual environment.