Crashes involving pedestrians are particularly common at unsignalized mid-block crosswalks, where, sometimes, vehicles do not yield to pedestrians. A refuge island (RI) is a countermeasure at mid-block crosswalks on two-lane roads to improve safety in pedestrian–vehicle conflicts. This study investigates the impact of RI at unsignalized mid-block crosswalks on pedestrian crossing behavior and conflict severity, considering vehicle approach speed and approach direction. A virtual reality experiment was designed to compare pedestrian crossing behaviors in different scenarios. Results revealed that at higher vehicle approaching speeds, pedestrians tended to accept shorter gaps, leading to a higher rate of unsafe crossings. Generally, in RI setting, pedestrians accepted significantly shorter gaps, which increases the operational efficiency of the crosswalk without significantly affecting the severity of conflicts with vehicles. Furthermore, the subjective evaluation of the pedestrians after the experiment clearly indicated their preference for the RI setting, as they reported a safer crossing experience.