Virtual reality (VR) brings radical new possibilities to the empirical study of social music cognition and interaction. In the present article, we consider the role of VR as a research tool, based on its potential to create a sense of “social presence”: the illusory feeling of being, and socially interacting, inside a virtual environment. This makes VR promising for bridging ecological validity (“research in the wild”) and experimental control (“research in the lab”) in empirical music research. A critical assumption however is the actual ability of VR to simulate real-life social interactions, either via human-embodied avatars or computer-controlled agents. The mediation of social musical interactions via VR is particularly challenging due to their embodied, complex, and emotionally delicate nature. In this article, we introduce a methodological framework to operationalize social presence by a combination of factors across interrelated layers, relating to the performance output, embodied co-regulation, and subjective experiences. This framework provides the basis for the proposal of a pragmatic approach to determine the level of social presence in virtual musical interactions, by comparing the outcomes across the multiple layers with the outcomes of corresponding real-life musical interactions. We applied and tested this pragmatic approach via a case-study of piano duet performances of the piece Piano Phase composed by Steve Reich. This case-study indicated that a piano duet performed in VR, in which the real-time interaction between pianists is mediated by embodied avatars, might lead to a strong feeling of social presence, as reflected in the measures of performance output, embodied co-regulation, and subjective experience. In contrast, although a piano duet in VR between an actual pianist and a computer-controlled agent led to a relatively successful performance output, it was inadequate in terms of both embodied co-regulation and subjective experience.