A system and method for providing hardware virtualization and resource management in a virtual machine environment. In accordance with an embodiment, an application server environment includes a computer system, application server, and virtual machine (for example, a Java Virtual Machine or JVM). In accordance with an embodiment, a virtualization layer is provided at each physical machine, including a hypervisor for partitioning virtual machines over the machine. An execution layer runs a single Java-based application, focusing on running that application as efficiently as possible. In accordance with another embodiment, the system comprises two main components: a lower-level, execution environment that replaces the usual operating system; and a higher-level, resource broker that is responsible for handing out new virtual machines to the above layers, and for monitoring the current resource usage of the running virtual machines.