In a novel experimental setting, we augmented a variation of traditional compassion meditation with our custom-built VR environment for multiple concurrent users. The presence of another user’s avatar in shared virtual space supports social interactions and provides an active target for evoked compassion. The system incorporates respiration and brainwave-based biofeedback to enable closed-loop interaction of users based on their shared physiological state. Specifically, we enhanced interoception and the deep empathetic processes involved in compassion meditation with real-time visualizations of: breathing rate, level of approach motivation assessed from EEG frontal asymmetry, and dyadic synchrony of those signals between two users. We manipulated these interventions across eight separate conditions (dyadic or solo meditation; brainwave, breathing, both or no biofeedback) in an experiment with 39 dyads (N=8), observing the effect of conditions on self-reported experience and physiological synchrony. We found that each different shared biofeedback type increased users’ self-reported empathy and social presence, compared to no-biofeedback or solo conditions. Our study illustrates how dyadic synchrony biofeedback can expand the possibilities of biofeedback in affective computing and VR solutions for health and wellness.