An apparatus for providing optical illusion effects, which includes a first projection screen; an area from which persons may view the first projection screen; a stage area between the viewing area and the first projection screen; an illumination system for the stage area so that objects on the stage may be illuminated at a desired light level without directly illuminating the first screen; an inclined, partially silvered mirror between the viewing area and the stage area; a second projection screen positioned in a second plane at a first angle to the first plane, wherein the inclined mirror is positioned between the first and second planes; a first projector for projecting images on the first projection screen so that images on the first projection screen may be seen by viewers in the viewing area; a second projector for projecting images on the second projection screen so that images on the second projection screen are visible to the viewers by means of reflection from the mirror and appear to be located at a selected location; and a component for changing between images from the projector so that viewers may be presented an image from either or both projector at any one time. Methods of using the apparatus include providing the optical illusion of having characters and objects merge interactively with projected images.