Modern 3D animation systems let a growing number of people generate increasingly sophisticated animated movies, frequently for tutorials or multimedia documents. However, although these tasks are inherently three dimensional, these systems' user interfaces are still predominantly two dimensional. This makes it difficult to interactively input complex animated 3D movements. We have developed Virtual Studio, an inexpensive and easy-to-use 3D animation environment in which animators can perform all interaction directly in three dimensions. Animators can use 3D devices to specify complex 3D motions. Virtual tools are visible mediators that provide interaction metaphors to control application objects. An underlying constraint solver lets animators tightly couple application and interface objects. Users define animation by recording the effect of their manipulations on models. Virtual Studio applies data-reduction techniques to generate editable representations of each animated element that is manipulated.