Software tools that utilize haptics for sculpting precise fitting cranial implants are utilized in an augmented reality immersive system to create a virtual working environment for the modelers. The virtual environment is designed to mimic the traditional working environment as closely as possible, providing more functionality for the users. The implant design process uses patient CT data of a defective area. This volumetric data is displayed in an implant modeling tele-immersive augmented reality system where the modeler can build a patient specific implant that precisely fits the defect. To mimic the traditional sculpting workspace, the implant modeling augmented reality system includes stereo vision, viewer centered perspective, sense of touch, and collaboration. To achieve optimized performance, this system includes a dual-processor PC, fast volume rendering with three-dimensional texture mapping, the fast haptic rendering algorithm, and a multi-threading architecture. The system replaces the expensive and time consuming traditional sculpting steps such as physical sculpting, mold making, and defect stereolithography. This augmented reality system is part of a comprehensive tele-immersive system that includes a conference-room-sized system for tele-immersive small group consultation and an inexpensive, easily deployable networked desktop virtual reality system for surgical consultation, evaluation and collaboration. This system has been used to design patient-specific cranial implants with precise fit.