In this paper we describe a tangible user interface "Tangible Tiles", which uses optically tracked transparent plexiglass tiles for interaction and display of projected imagery on a table or whiteboard. We designed and implemented a number of interaction techniques based on two sets of different tiles, which either directly represent digital objects or function as tools for data manipulation. To discover the strengths and weaknesses of our current prototype, we conducted a user study that compared simple interaction with digital imagery in three conditions: 1) our Tangible Tiles system, 2) a commercial touch screen, and 3) a control condition using real paper prints. Although we discovered some conceptual problems, the results show potential benefits of Tangible Tiles for supporting collaboration and natural interaction. Copyright the author(s) and CHISIG.