Understanding user perceptions of interacting with the virtual world is one of the research focuses in recent years, given the rapid proliferation of virtual reality (VR) and driven to establish the metaverse. Users can generate a familiar connection between their bodies and the virtual world by being embodied in virtual hands, and hand representations can induce users’ embodiment in VR. The sense of embodiment represents the cognitive awareness of one's manifestation and includes three subcomponents: the sense of body ownership, agency and self-location. There is insufficient evidence in the literature about the effects of hand designs on the embodiment, especially based on studying its three subcomponents. This study investigates how virtual hand designs with five realism levels influence the three subcomponents of embodiment in VR. This research employs a self-report questionnaire commonly used in the literature to assess embodiment and evaluates agency and self-location by introducing implicit methods (intentional binding and proprioceptive measurement) derived from psychology. Besides, the objective data of eye tracking is used to explore the connection between embodiment and hand designs, and classifying participants’ eye tracking data to help analyze the link between embodiment and user attention. Overall, this research makes a major contribution through a systematic exploration of users’ embodied experience in VR and offers important evidence of the effects of virtual hand designs on body ownership, agency, and self-location, respectively. In addition, this study provides a valuable reference for further investigation of embodiment through implicit and objective methods, and practical design recommendations for virtual hand design in VR applications.