An augmented reality system includes left and right transparent eyepieces through which a user can view the real world and which serve to couple imagewise modulated light into the user's eyes in order to display virtual content components of a mixed reality experience. The system further includes left and right speakers and a facility for user spatial manipulation of virtual objects. The system produces spatialized audio that has a virtual sound source position fixed to one or more virtual objects that are spatially manipulated by the user. Thus the system provides more realistic visual and auditory presentation of virtual components of a mixed reality experience.