This study investigates a virtual reality (VR) cross-cultural interactive learning environment that combines a 360-degree video camera for content creation, a viewing tool, and a video conference platform for real-time interaction. This environment aims to address the limitations of traditional 360-degree VR tools, particularly in enabling simultaneous, interactive engagement among multiple users. The study recruited 31 university students from China and Indonesia utilizing convenience sampling to test the efficacy of the environment in fostering cognitive development and challenging cross-cultural stereotypes. The methodology included analysing student-created content, questionnaire responses, and insights from semistructured interviews. The analysis, grounded in a cognitive development taxonomy and an assessment of stereotype changes, revealed that the students reached the "remember" and "understand" cognitive levels. Additionally, prevalent stereotypes held by the students were addressed. The immersive nature of the VR environment and the interactions with foreign peers were highly appreciated, significantly contributing to cognitive growth and stereotype mitigation. These findings offer valuable insights for educators and researchers in technology-assisted cross-cultural education, emphasizing the importance of designing interactive VR-based activities that effectively facilitate cognitive development and address cross-cultural stereotypes.