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Entering the clinical environment presents medical students with several challenges. They need to understand the organization of a hospital ward and practice clinical decision making; that is, to learn clinical competencies. It may be beneficial for students to also practice clinical competencies in a simulated environment. The virtual hospital is a digital educational tool, in which 3-year undergraduate medical students meet, diagnose, and treat fictive patients suffering from infectious diseases. The students work with the virtual hospital in a seminar-like setting with other students under supervision of clinical teachers. Three group sessions are held during the course of one week where students can follow patient progress each day in real time and follow up on initiated treatments. The aim of this study was to explore experiences of the virtual hospital among students and clinical teachers. This qualitative interview study was set at an academic teaching hospital in Gothenburg, Sweden. Based on an interview guide, medical students (n=6) and clinical teachers (n=6) were interviewed. Interviews were transcribed verbatim and subject to qualitative content analysis. Students experienced the virtual hospital to be highly educational, as well as realistic and engaging. They raised how open discussions were allowed and encouraged, and inherently student-centered. Teachers experienced the virtual hospital as having learning in focus and that the many disturbances of a regular clinical ward were absent. They found the virtual hospital to be user-friendly, instructive and enjoyable and that the teaching method in itself directed them into a student-centered manner. Both students and teachers were highly appreciative of using the virtual hospital as a learning activity and teaching method. The study suggests that the virtual hospital is suitable for students in the early clinical phase of medical education as it introduces clinical routines and practices in a controlled manner. The virtual hospital proved effective in introducing undergraduate medical students to clinical reasoning and may act as a complement to regular clinical rotations. There is great potential in the virtual hospital, as it is flexible and can be adapted to other medical areas and settings, other educational programs, and interprofessional education.