Predicting the environment people will be living in during the next millennium is not easy task, even at all possible. Film makers continually portray baffling urban decay where chaos takes over amidst convulsive and apparently uncontrollable growth. When this is coupled with a grotesque transformation of human relationships the consequence of a generalized mistrust in mankinds capacity to cope with the many implications that are the result of radical modifications to interpersonal communication and the introduction of the virtual dimension of being- one can only feel disconcerted. Undoubtedly, we are going to encounter virtual space in combination with the physical space during the next millennium. We are more familiar with physical than with virtual space both as users and as practitioners. Physical space is the material object of spatial planning and urbanism. It comprises, traditionally, zones adapted to activities and channels of communication providing links between zones, catering to transport or various types of buildings, if one includes architecture. Physical space, by the way, covers both urban and rural space. Virtual space, on the other hand, is less familiar and has a confined application. The vocabulary which partly explains the frequent use of spatial metaphors to describe it are: web site, information superhighway or electronic highway, teleport, virtual community or electronic neighborhood, virtual or digital cities, the city of bits, etc. These spatial metaphors need to be handled with caution as they tend to obscure issues or even turn into ideologies. Spatial metaphors may tempt some people to escape from real-world urban problems into virtual "urban" space. Metaphors are to be avoided when the issue is how to deal with the interactions between physical and virtual space. In other words, they must be defined as distinct entities. In this paper, the intention is to analyze the meaning of virtual and physical space and their interaction in the contemporary urban planning and design.