We have developed a series of lifelike computer characters called Virtual Petz. These socially intelligent agents live on your PC computer desktop. The Petz are autonomous characters with real-time layered 3D animation and sound. Using a mouse the user moves a hand-shaped cursor to directly touch, pet, and pick up the characters, as well as use toys and objects. Virtual Petz grow up over time and strive to he the user’s friends and companions. They have evolving social relationships with the user and each other. To implement these agents we have invented hybrid techniques that draw from improvisational drama, cartoons, classical AI and video games. As of June 1997 over a million copies of virtual Petz have been sold around the world.