The virtual environment is the important and indispensable part of virtual reality The method of modeling virtual environment is studied and discussed, based on the research of the basic theory and key technology of virtual reality. Taking the indoor virtual environment modeling as an example, the whole design object, design idea, design rules and the key technologies of indoor virtual environment modeling is dissertate systematically. The modeling objects are reusable and interactive owing to the adaptation of object-oriented and agent-oriented techonlogy. The actual scene is classified according to structure and layer so as to the scene was managed effectively and displayed more quickly. So the system had the properties of immersion, interaction and imagination at some extent.