Immersive virtual environments (VEs) provide participants with computer-generated environments filled with virtual objects to assist in learning, training, and practicing dangerous and/or expensive tasks. But does having every object being virtual inhibit the interactivity and level of immersion? If participants spend most of their time and cognitive load on learning and adapting to interacting with virtual objects, does this reduce the effectiveness of the VE? We conducted a study that investigated how handling real objects and self-avatar visual fidelity affects performance and sense of presence on a spatial cognitive manual task. We compared participants' performance of a block arrangement task in both a real-space environment and several virtual and hybrid environments. The results showed that manipulating real objects in a VE brings task performance closer to that of real space, compared to manipulating virtual objects. There was no signifi-cant difference in reported sense of presence, regardless of the self-avatar's visual fidelity or the presence of real objects.