An interactive exercise apparatus engages a user's mind and body. The apparatus comprises an exercise mechanism, a steering mechanism, and a control mechanism for manipulation by the user to achieve exercise, to indicate a direction of motion, and to interact with virtual objects in a simulated environment. The exercise mechanism can be, for example, the steps of a stair climbing simulator or the pedals of a bicycle, preferably a recumbent bicycle. A simulated environment (e.g., an interactive simulated three-dimensional environment or an interactive simulated three-dimensional fluid environment) is generated by a computer and displayed on a display system for the user. In one embodiment, the simulated environment comprises an enclosed space representing a game field. In this embodiment, an interactive competitive ball game is played using networked exercise apparatus. The user manipulates the exercise mechanism, the steering mechanism, and the control mechanism to travel throughout the game field and interact with virtual objects to score points. The computer controls the exercise mechanism and monitors the exercise mechanism, the steering mechanism, and the control mechanism to determine user position and the position of virtual objects in the simulated environment. The display provides a visual display of the user's position and the position of virtual objects in the simulated environment. A plurality of the interactive exercise apparatus can be networked together to allow group participation and competition in the simulated game.