As we move towards a future with Automated Vehicles (AVs) incorporated in the current traffic system, it is crucial to understand driver-pedestrian interaction, in order to enhance AV design and optimization. Previous research in this area, which has primarily used naturalistic observations or single-actor virtual reality simulations, has been limited by its inability to draw causal conclusions, also due to a lack of real human–human interactions. Our study addresses these limitations by employing a high-fidelity distributed simulation setup that links drivers in a motion-based simulator with pedestrians in a CAVE-based environment. This method allows for the examination of real-time and reciprocal interactions across a range of road-crossing scenarios. Using thirty-two pairs of drivers and pedestrians, we investigated how different factors, such as the presence of zebra crossings and varying time gaps of the approaching vehicle, influence driver behaviour and pedestrian crossing decisions. The effect of drivers’ control of the vehicle during such crossings (e.g., braking behaviour and lateral deviation) on pedestrians’ crossing decisions were also analysed. We found that the distribution of drivers’ average deceleration values were bimodal, where drivers either markedly yielded to pedestrians, or continued in their path, with very few instances of intermediate behaviour. We also found that pedestrian decisions were seemingly influenced by the different braking strategies adopted by the driver, with pedestrians crossing before the vehicles in response to soft and early, or late and hard braking, while late and soft braking often resulted in the vehicle passing first. We also observed a slight lateral movement of the vehicle away from pedestrians when drivers were not yielding, but more of a lateral deviation towards them when yielding. This may be because drivers subconsciously transfer their walking interaction habits to their driving behaviour, to avoid a collision with pedestrians. Finally, our results showed a stronger influence of these kinematic cues on pedestrian crossing decisions, when compared to zebra crossings. As well as highlighting the value of a novel approach for investigating vehicle–pedestrian interactions, this study illustrates how vehicle cues can assist pedestrian decisions, adding new knowledge in the development of human-like behaviour for future AVs.