To blur the physical environment viewable through a transparent display, a system may capture images of the physical environment using a camera, warp the images of the physical environment from the perspective of the camera to the perspective of a user's eye, and display a blurred version of the warped images. The transparent display overlays a blurred version of the physical environment over the physical environment such that the physical environment appears blurred. This type of blur effect may be applied across the entire physical environment that is viewable through the transparent display or across only a subset of the physical environment that is viewable through the transparent display.