This paper presents a telerehabilitation system for kinesthetic therapy (treatment of patients with arm motion coordination disorders). Patients can receive therapy while being immersed in a virtual environment (VE) with haptic feedback. Our system is based on a Haptic Workstation that provides force-feedback on the upper limbs. One of our main contributions is the use of a handheld device as the main interface for the therapist. The handheld allows for monitoring, adapting and designing exercises in real-time (dynamic VE). Visual contact with the patient is kept by means of a webcam. Categories and Subject Descriptors H.5.2 [Information Interfaces and Presentation]: User Interfaces—Haptic I/O, Input devices and strategies; J.3 [Computer Applications]: Life and Medical Sciences— Health General Terms Experimentation, Human Factors, Design Keywords telerehabilitation, haptic interfaces, handheld devices, kinesthetic therapy, virtual environments