Abstract: An interactive augmented reality system includes an interactive object and a portable communication device. The communication device includes a control module, an image capture module and a communication module. The control module controls and operates the portable communication device and the interactive object. The image capture module is connected with the control module to capture an image of the interactive object. The communication module is connected with the control module to exchange information with interactive object. The control module computes and rebuilds the image, and then overlays the image on a virtual scene generated by the control module. As a result, an augmented reality image is generated, and an action signal is transmitted to the interactive object by the portable communication device, such that the interactive object executes a preset action according to the action signal. The system attracts users, reduces the operation difficulty, and enhances the user experiences.