The optical part of a virtual reality system often contains an exit pupil that is larger than the entrance pupil of the eye. However, a system with a small exit pupil could have several advantages: a larger angular image field, more efficient use of light, less accommodation/ convergence conflict, and better optical quality. We examine two possible drawbacks of using a small exit pupil. One is related to the loss in image quality at exit pupil decentration and the other is related to the limitations in the freedom of eye movement. It appears that an optical system with a small exit pupil (?1 mm) and a large image field (>15 deg) is feasible only if a combination of eye-tracker and exit pupil shifting mechanism is implemented.