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The acceptance of virtual environment (VE) technology requires scrupulous optimization of the most basic interactions in order to maximize user performance and provide efficient and enjoyable virtual interfaces. Motivated by insufficient understanding of the human factors design implications of interaction techniques and tools for virtual interfaces, this paper presents results of a formal study that compared two basic interaction metaphors for egocentric direct manipulation in VEs, virtual hand and virtual pointer, in object selection and positioning experiments. The goals of the study were to explore immersive direct manipulation interfaces, compare performance characteristics of interaction techniques based on the metaphors of interest, understand their relative strengths and weaknesses, and derive design guidelines for practical development of VE applications.