Background: People with mild to borderline intellectual disability (MBID; IQ=50-85) are at risk for developing an alcohol use disorder (AUD). One factor contributing to this risk is sensitivity to peer pressure. Hence, tailored trainings are needed to practice alcohol refusal in impacted patients. Immersive virtual reality (IVR) appears promising to engage patients in dialogs with virtual humans, allowing to practice alcohol refusal realistically. However, requirements for such an IVR have not been studied for MBID/AUD. Objective: This study aims to develop an IVR alcohol refusal training for patients with MBID and AUD. In this work, we cocreated our peer pressure simulation with experienced experts in addiction care. Methods: We followed the Persuasive System Design (PSD) model to develop our IVR alcohol refusal training. With 5 experts from a Dutch addiction clinic for patients with MBID, we held 3 focus groups to design the virtual environment, persuasive virtual human(s), and persuasive dialog. Subsequently, we developed our initial IVR prototype and conducted another focus group to evaluate IVR and procedures for clinical usage, resulting in our final peer pressure simulation. Results: Our experts described visiting a friend at home with multiple friends as the most relevant peer pressure situation in the clinical setting. Based on the identified requirements, we developed a social-housing apartment with multiple virtual friends present. Moreover, we embedded a virtual man with generic appearance to exert peer pressure using a persuasive dialog. Patients can respond to persuasive attempts by selecting (refusal) responses with varying degrees of risk for relapse in alcohol use. Our evaluation showed that experts value a realistic and interactable IVR. However, experts identified lacking persuasive design elements, such as paralanguage, for our virtual human. For clinical usage, a user-centered customization is needed to prevent adverse effects. Further, interventions should be therapist delivered to avoid try-and-error in patients with MBID. Lastly, we identified factors for immersion, as well as facilitators and barriers for IVR accessibility. Conclusions: Our work establishes an initial PSD for IVR for alcohol refusal trainings in patients with MBID and AUD. With this, scholars can create comparable simulations by performing an analogous cocreation, replicate findings, and identify active PSD elements. For peer pressure, conveying emotional information in a virtual human’s voice (eg, paralanguage) seems vital. However, previous rapport building may be needed to ensure that virtual humans are perceived as cognitively capable entities. Future work should validate our PSD with patients and start developing IVR treatment protocols using interdisciplinary teams.