Inhibitory control develops over time and is linked to fronto-striatal maturation. Traditional computerised assessments often lack ecological validity and are not age appropriate. Here, we developed a naturalistic, age-appropriate paradigm using a cave automatic virtual environment (CAVE) and mobile functional near-infrared spectroscopy (fNIRS) to measure response inhibition in children aged 3-7-years. The new task was validated in adults (N = 24, M = 30.38, SD = 10.54), and children (N = 36, M = 4.44, SD = 1.11 years). Participants completed two Go/No-Go tasks: a standard computer-based version and an adapted CAVE version, while fNIRS recorded brain activity in the bilateral dorsolateral frontal cortices. The aims were to compare behavioural performance in the CAVE and computer tasks, establish if the tasks capture developmental differences in inhibitory control, assess their psychometric properties (convergent and divergent validity), determine the feasibility and acceptability of the multimodal CAVE-fNIRS setup in early childhood, and characterise the neural correlates of response inhibition in both 2D and 3D tasks. Consistent with typical Go/No-Go tasks, we found higher error rates in mixed blocks compared to Go-only blocks. No significant correlations were found between self-reported (adults) or parent-reported (children) inhibition measures and task performance, nor between performance metrics across the CAVE and computer tasks, though children generally exhibited poorer performance across most metrics compared to adults, reflecting the prolonged developmental trajectory of inhibitory control. The novel CAVE task proved feasible and acceptable, with high completion rates and absent or minimal virtual reality-induced symptoms. Specific to the early childhood sample, Go/No-Go blocks in the CAVE task elicited higher activity in the left inferior frontal gyrus. This study shows the brain correlates of response inhibition during unrestricted movement in 2D and 3D settings in young children, integrating age-appropriate fNIRS with an immersive CAVE, opening potential new approaches to studying neurodevelopment.