Aggression and emotional distress are all too common in at-risk adolescents in closed residential institutions, which often contain restrictive conditions such as overcrowding, lack of autonomy, and shifting staff–youth relationships. In war-torn areas like Israel, these restrictive conditions are amplified with additional stressors such as the threat of injury or even death. In such settings, feasibility studies are greatly needed to investigate how to reduce aggression and emotional distress in vulnerable adolescents. This feasibility randomized clinical trial evaluated the effectiveness of a virtual reality (VR)-based relaxation intervention in decreasing self-reported aggression tendencies and emotional distress and increasing positive psychological states among at-risk Israeli adolescents in residential care. Fifty-two participants from different residential facilities were randomly assigned to a treatment group (n = 27), who received twice-weekly VR relaxation sessions, or a waitlist control group (n = 25). Self-report measures of aggression and emotional distress were administered at baseline, midway through the intervention (2 weeks), and at the end of the intervention (4 weeks). Mixed-effects linear models suggest that the treatment group demonstrated clear reductions in both aggression and emotional distress across the intervention period relative to the control group (Hedges' gs: 0.85–1.42). In addition, immediately before and after each VR session, participants in the treatment group reported consistent increases in positive mood and flow experience (Hedges' gs: 0.45–0.73). These preliminary findings support the utility of brief VR relaxation practices in reducing negative emotional states and fostering well-being among high-risk youth in closed institutional settings.