We describe the design and development of PuzzleTale, an interactive storytelling system that makes use of tangible puzzle pieces on the surface of an interactive table. In the PuzzleTale system, assembling the tangible puzzle piece can affect the digital characters and create a flexible story context. Different assembled patterns represent the diverse ways that users explore and compose the story. The PuzzleTale system creates a dynamic causal relationship between the process of interactive storytelling and the outcome of a story. There are two variables which continuously affect the story context including the amount and the sequence of digital characters that the reader plays. The system engages the reader participating in the development of the story through playing tangible puzzle pieces with digital characters as a decision making tool, thus providing individualized storytelling experiences. Categories and Subject Descriptors