The relationship between humans and physical tools is fundamental to all forms of work. With the proliferation of technology, the field of Human-Computer Interaction has focussed on the development of tools to interface with computers. Augmented Reality (AR) is one such technology that has gained prominence in recent years by merging physical and digital elements to enhance labour and promising more versatile and adaptive forms of work. While virtual objects provided by AR can enrich our physical environments, they remain intangible, presenting a number of challenges and opportunities for interaction.

Considering this, we first argue the necessity of adopting physical tools to interact with virtual objects in AR. Second, the design of physical tools in AR can yield entirely new interaction possibilities especially when combined with the physical environment. And third, we advocate for the use of physical but versatile tools in AR, capable of modification to meet the demands of the task and user.

This thesis explores Tool-making, Tool-Modifying, and Tool-Using for interacting with virtual objects in head-mounted display AR. The research includes a design space of physically-modifiable AR tools, supported by two empirical studies, and a toolkit for creating physically-modifiable cubic AR tools. We outline the surface-based touch gestures and 3D interaction techniques enabled by the cubic tools and combine them into five demonstrative AR applications. Lastly, we empirically explore and evaluate a 3D manipulation technique enabled by the toolkit.

Results of the design space exploration and studies showcase how physically-modifiable AR tools can engender novel forms of interaction, alleviate common limitations of physical interfaces, and address certain interaction challenges in current AR techniques. The aim of this thesis is to stimulate fresh considerations for AR design, bringing interaction to the physical environment where humans excel, and envisioning tools as the ultimate mediators in the ultimate display.