In recent years 3D virtual characters have become more common in desktop interfaces, particularly in gaming and entertainment applications. In this paper we describe how augmented reality (AR) technology can be used to bring virtual characters into the real world and compare AR characters to other types of virtual characters. We have developed a handheld AR educational application in which a virtual character teaches users about art history. We present results from a user study that explores how realistic the character needs to be for it to be an effective and engaging educational tool and if augmented reality offers benefits for this type of application. Categories and Subject Descriptors H.5.1 [Information Interfaces and Presentation]: Multimedia Information Systems - Animations, Artificial, Augmented, and Virtual Realities. K.3.1 [Computing Milieux]: Computer Uses in Education - Collaborative learning. General Terms Design, Experimentation, Human Factors, Verification Keywords Virt...