The use of virtual environments has made possible improvements over the representation of large-scale spaces using conventional visual media. The virtual environment used for the research reported here employs the technique of displaying panoramic images in a cylindrical form. Combining use of photographic images with ease of construction, this environment has high potential for effective use in educational applications. As a step toward realizing this potential, research reported here has three objectives: 1) to explore its suitability as an educational environment from the perspective of the user's spatial orientation; 2) by analyzing the navigation process to discover user characteristics and issues; and 3) to analyze factors in the environment's spatial structure that lead to users' losing their way. To achieve these objectives, we constructed a virtual park, then asked the elementary school students used as experimental subjects to follow prescribed routes and to find a bench inside the park. Based on the results of these experiments, we propose improvements that address the issues identified.