Virtualisation is a promising technology that has attracted much attention, particularly in the grid community. Recent advances using virtualisation technologies enable multiplexing the physical resources by means of virtual machines (VMs) resulting in better resource utilisation. We propose virtual cluster development environment (VCDE) to dynamically form virtual cluster on demand, providing the grid execution environment using VMs. The formation of a grid environment to execute any parallel or sequential application has been automated by VCDE. The user can simply submit the job along with the requirements of hardware and software needed for the execution. The VCDE provides easy access to the grid by reducing the burden of Globus toolkit installation and other configurations. It is important to note that there is no human intervention in the preparation of virtual cluster as well as the grid environment. The proposed VCDE uses virtualisation technologies, and it helps the user to make use of grid as easily as possible. © 2011 Copyright Taylor and Francis Group, LLC.