Recent studies suggest that the human body plays a critical role in episodic memory. Still, the precise relationship between bodily self-consciousness (BSC) and memory formation of specific events, especially in real-life contexts, remains a topic of ongoing research. The present study investigated the relationship between BSC and episodic memory (EM) using immersive virtual reality (VR) technology. Participants were immersed in an urban environment with naturalistic events, while their visuomotor feedback was manipulated in three within-subjects conditions: Synchronous, Asynchronous, and No-body. Our results show that asynchronous visuomotor feedback and not seeing one’s body, compared to synchronous feedback, decrease the sense of self-identification, self-location and agency, and sense of presence. Moreover, navigating in the Asynchronous condition had a detrimental impact on incidental event memory, perceptual details, contextual association, subjective sense of remembering, and memory consolidation. In contrast, participants in the No-Body condition were only impaired in egocentric spatial memory and the sense of remembering at ten-day delay. We discuss these findings in relation to the role of bodily self-representation in space during event memory encoding. This study sheds light on the complex interplay between BSC, sense of presence, and episodic memory processes, and strengthens the potential of embodiment and VR technology in studying and enhancing human cognition.