An interactive virtual dynamic environment for testing control strategies for neural machine interfacing with artificial limbs offers several advantages. The virtual environment is low-cost, easily configured, and offers a wealth of data for post-hoc analysis compared with real physical prostheses and robots. For use with prosthetics and research involving amputee subjects it allows the valuable time with the subject to be spent in experiments rather than fixing hardware issues. The usefulness of the virtual environment increases as the realism of the environment increases. Most tasks performed with limbs require interactions with objects in the environment. To simulate these tasks the dynamics of frictional contact, in addition to inertial limb dynamics must be modeled. Here, subjects demonstrate real-time control of an eight degree-of-freedom virtual prosthesis while performing an interactive box-and-blocks task. With practice, four nonamputee subjects and one shoulder disarticulation subject were able to successfully transfer blocks in the virtual environment at an average rate of just under two blocks per minute. The virtual environment is configurable in terms of the virtual arm design, control strategy, and task.