This paper introduces the concept of Adaptive Rooms, which are virtual environments able to dynamically adapt to users' needs, including `physical' and cognitive workflow requirements, number of users, differing cognitive abilities and skills. Adaptive rooms are collections of virtual objects, many of them self-transforming objects, housed in an architecturally active room with information spaces and tools. An ontology of objects used in adaptive rooms is presented. Virtual entities are classified as passive, reactive, active, and information entities, and their sub-categories. Only active objects can be self-transforming. Adaptive Rooms are meant to combine the insights of ubiquitous computing -- that computerization should be everywhere, transparently incorporated -- with the insights of augmented reality -- that everyday objects can be digitally enhanced to carry more information about their use. To display the special potential of adaptive rooms, concrete examples are giv...