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This paper describes design criteria for creating highly embedded, interactive spaces that we call Intelligent Environments. The motivation for building these systems is to bring computation into the real, physical world to support what is traditionally considered non-computational activity. We describe an existing prototype space, known as the Intelligent Room, which was created to experiment with different forms of natural, multimodal human-computer interaction. We discuss design decisions encountered while creating the Intelligent Room and how the experiences gained during its use have shaped the creation of its successor.