This thesis presents a new 3-dimensional (3D) user interface system for a Cave Automated Virtual Environment (CAVE) application, based on Virtual Reality (VR), Augmented Reality (AR), and Tangible User Interface (TUI). We explore fundamental 3D interaction tasks with our user interface for the CAVE system. User interface (UI) is comprised of a specific set of components, including input/output devices and interaction techniques. Our approach is based on TUIs using ARToolKit, which is currently the most popular toolkit for use in AR projects. Physical objects (props) are used as input devices instead of any tethered electromagnetic trackers. An off-the-shelf webcam is used to get tracking input data. A unique pattern marker is attached to the prop, which is easily and simply tracked by ARToolKit. Our interface system is developed on CAVE infrastructure, which is a semi-immersive environment. All virtual objects are directly manipulated with props, each of which corresponds to a certain virtual object. To navigate, the user can move the background itself, while virtual objects remain in place. The user can actually feel the prop's movement through the virtual space. Thus, fundamental 3D interaction tasks such as object selection, object manipulation, and navigation are performed with our interface. To feel immersion, the user is allowed to wear stereoscopic glasses with a head tracker. This is the only tethered device for our work. Since our interface is based on tangible input tools, seamless transition between one and two-handed operation is provided. We went through three design phases to achieve better task performance. In the first phase, we conducted the pilot study, focusing on the question whether or not this approach is applicable to 3D immersive environments. After the pilot study, we redesigned props and developed ARBox. ARBox is used for as interaction space while the CAVE system is only used for display space. In this phase, we also developed interaction techniques for fundamental 3D interaction tasks. Our summative user evaluation was conducted with ARDesk, which is redesigned after our formative user evaluation. Two user studies aim to get user feedback and to improve interaction techniques as well as interface tools' design. The results from our user studies show that our interface can be intuitively and naturally applied to 3D immersive environments even though there are still some issues with our system design. This thesis shows that effective interactions in a CAVE system can be generated using AR technique and tangible objects.