The recent technological advance of digital high resolution imaging has allowed the field of pathology and medical laboratory science to undergo a dramatic transformation with the incorporation of virtual microscopy as a simulation-based educational and diagnostic tool. This transformation has correlated with an overall increase in the use of simulation in medicine in an effort to address dwindling clinical resource availability and patient safety issues currently facing the modern healthcare system. Virtual microscopy represents one such simulation-based technology that has the potential to enhance student learning and readiness to practice while revolutionising the ability to clinically diagnose pathology collaboratively across the world. While understanding that a substantial amount of literature already exists on virtual microscopy, much more research is still required to elucidate the full capabilities of this technology. This review explores the use of virtual microscopy in medical education and disease diagnosis with a unique focus on key requirements needed to take this technology to the next level in its use in medical education and clinical practice.