Interactive movies, in which interaction capabilities are introduced into movies, is considered to be a new type of media that integrates various media, including telecommunications, movies, and video games. In interactive movies, people enter cyberspace and enjoy the development of a story there by interacting with the characters in the story. In this paper, we first explain the concept of interactive movies using examples of movies developed on a prototype system, then describe techniques for improving the interactivity. The current system incorporates two significant improvements for multimedia interactivity: the introduction of interaction at any time and two-person participation through the use of network communications. The software and hardware configurations of the system are briefly summarized. The paper concludes with an example of an interactive story installed in this system and briefly describes the interaction between the participants and the system. © 1998 ACM.