Exemplary methods and systems relate to detecting physical objects near a substantially transparent head-mounted display (HMD) system and activating a collision-avoidance action to alert a user of the detected objects. Detection techniques may include receiving data from distance and/or relative movement sensors and using this data as a basis for determining an appropriate collision-avoidance action. Exemplary collision-avoidance actions may include de-emphasizing virtual objects displayed on the HMD to provide a less cluttered view of the physical objects through the substantially transparent display and/or presenting new virtual objects.