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Virtual private server (VPS) is a marketing term used by Internet hosting services to refer to a virtual machine. The term is used for emphasizing that the virtual machine, although running in software on the same physical computer as other customers' virtual machines, is functionally equivalent to a separate physical computer, is dedicated to the individual customer's needs, has the privacy of a separate physical computer, and can be configured to run as a server computer (i.e. to run server software). The term Virtual Dedicated Server or VDS is used less often for the same concept.

Each virtual server can run its own full-fledged operating system and can be independently rebooted.

The practice of partitioning a single server so that it appears as multiple servers has long been common practice on mainframe computers and mid-range computers such as the IBM AS/400. It has become more prevalent with the development of virtualization software and technologies for microcomputers.