The main purpose of this study is to develop an educational tool to help children acquire algorithmic thinking skills at an early age while having fun. The methodology combines modern technologies and approaches such as augmented reality (AR), gamification, and tangible user interfaces. In this application, the coding components consist of specially designed tangible command blocks in the form of jigsaw puzzle pieces. The application contains a 3D multi-level game environment, and the user is expected to control the game character by constructing an algorithm with physical command blocks. The constructed algorithm is scanned using a mobile AR application and converted into code that controls the game environment. The major design considerations during the development of this application were simplicity and accessibility. All design decisions were delineated extensively in the paper. In conclusion, an augmented reality-based gamified tangible programming kit is proposed to improve children’s algorithmic thinking skills at an early age. The application requires only a smartphone and printable command blocks. Thus, an inexpensive, accessible, and entertaining educational tool is developed.