In this paper we introduce the tangiBook, a tangible display system that allows realistic simulation and direct interaction with virtual surfaces. The tangiBook is based on an off-the-shelf laptop computer that incorporates an accelerometer and a webcam as standard equipment. Custom software allows the orientation of the laptop screen and the position of the observer to be tracked in real-time. Using this information, realistic images of surfaces with complex textures and material properties, illuminated by environment-mapped lighting, are rendered to the screen at interactive rates. Tilting the laptop or moving in front of the screen produces realistic changes in surface lighting and material appearance. Thus the tangiBook allows virtual surfaces to be observed and manipulated as naturally as real ones, with the added benefit that the material properties of the surfaces can be changed in real-time. We demonstrate the potential utility of the tangiBook in three application areas: material perception research, computer-aided appearance design, and enhanced access to collections in digital libraries and museums. With its unique capabilities and commodity roots, the tangiBook can be broadly deployed and should be useful in a wide range of applications.