Hi Nima,
Various versions of MATLAB have increasingly (over time) supported 'large' format MAT files. Provided you have MATLAB v7.3 or later (that's quite old now, so you probably have) you ought to be OK. Type ver at the command line to check.
Go to MATLAB, Preferences, General, MAT Files and check that the file was saved with the -v7.3 option... as that might be the origin of a problem (if that's unchecked on the version of MATLAB that created the file).
Next, is that 16GB of physical RAM that the VM has access to? Or is it based on swap space/hard drive? Check the settings of the VM and ensure that it's not just the VM size (which represents the size of the hard drive the VM can access - the RAM accessible by the VM might be different).
Hope you get it sorted
Tom
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