The purpose of this study was to document how teachers and students describe and comprehend the ways in which participating in an augmented reality (AR) simulation aids or hinders teaching and learning. Like the multi-user virtual environment (MUVE) interface that underlies Internet games, AR is a good medium for immersive collaborative simulation, but has different strengths and limitations than MUVEs. Within a design-based research project, the researchers conducted multiple qualitative case studies across two middle schools (6th and 7th grade) and one high school (10th grade) in the northeastern United States to document the affordances and limitations of AR simulations from the student and teacher perspective. The researchers collected data through formal and informal interviews, direct observations, web site posts, and site documents. Teachers and students reported that the technology-mediated narrative and the interactive, situated, collaborative problem solving affordances of the AR simulation were highly engaging, especially among students who had previously presented behavioral and academic challenges for the teachers. However, while the AR simulation provided potentially transformative added value, it simultaneously presented unique technological, managerial, and cognitive challenges to teaching and learning.