Older adults face a significantly higher risk of falls, and this age group accounts for the majority of fatal falls. Objectives: The objectives of this study are to explore the falls risk among community-dwelling elderly people and to construct a virtual reality-based simulation training program for fall management in the elderly. Methods: A cross-sectional study with a convenience sampling was conducted across seven urban communities from southern, central, and Northwestern China. A fall management simulation training program was designed based on the risk factors identified in the initial investigation using virtual reality technology. Results: A total of 767 community-dwelling older adults participated in the survey, and 11.6% of them reported a history of falls. The fall risks were identified in biological, behavioral, social, and environmental domains. The training program that integrates family and community supports can address falls risk management in the context of chronic illness, medications, daily activities, exercise, and living environment. The training tasks include basic gait exercise, obstacle avoidance training and multitask training. Conclusions: Simulation training can improve lower limb strength and postural balance in older adults, while also improving their ability to recognize hazardous situations that could lead to falls and learn how to avoid these risks, thereby preventing falls.