Haptic feedback in immersive virtual reality (IVR) systems is critical to enable a more intuitive and natural way of interacting with virtual objects. IVR-based haptic medical simulations such as needle insertion procedures have the potential to enhance clinicians’ haptic expertise. This work is a preliminary study on the use and implementation of IVR for needle simulators. Although few studies have quantified haptic skills such as force Just Noticeable Difference (JND) with the single finger, none have measured the force JND as recommended in the standard needle insertion protocol in an IVR environment. The hypothesis of this study is that there will be an improvement of force perception in the IVR, compared to that of the non-immersive virtual reality (NIVR) which facilitates the use of IVR for medical simulations. This paper emphasized on two objectives: firstly, the development of the observer state model for both the IVR and NIVR and the theoretical analysis of the psychophysical measures in both of the environments. Secondly, measures of force JND with the three fingers and comparison of these measures in NIVR to that of the IVR using psychophysical study with the force matching task, constant stimuli method, and isometric force probing stimuli to validate the model. Twenty voluntary subjects performed the experiment in both of the environments. Mean force JND and standard deviation of the JND were found to be 9.12% and 3.75% in the NIVR and 5.91% and 3.65% in the IVR (p value < 0.0001) which are in the same range of JNDs found in the literature (5–10%) for the NIVR using a single finger. Surprisingly, the results showed a better force JND in the IVR compared to that of the NIVR. Also, a simple state observer model was proposed to explain the improvement of force JND in the IVR. This study would quantitatively reinforce the use of IVR for the design of various medical simulators. © 2018, Springer-Verlag London Ltd., part of Springer Nature.