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Mixed reality -the close coupling of real world objects with computer generated information and functionality -has high potential for the creation of usable user interfaces. The implementation of practical applications that exploit these benefits requires an exploratory design approach to handle the interaction of application content with newly developed interaction techniques and complex hardware. In this paper we describe how agile methods from software engineering can be integrated with usability engineering and mixed reality development techniques to enable effective design space exploration. The approach was employed in the development of the Augmented Paper Map (APM) project in which conventional paper maps are enhanced with mixed reality functionality. Experiences with the method and future enhancements and modifications of the approach are discussed.