This paper describes VR Sketchpad, a pen-based computing environment for inputting and locating 3D objects in a virtual world. Designer can use the transparency layers to quickly trace and extract any image underlay from other application software. The 3D scene generation has three levels of complexity: simple extrusion of any drawn lines of shapes (i.e., straight or curved wall and column extrusion), solid modelling from a given geometric object representation (spheres, cones and boxes), and complex configuration with objects from graphics library (furniture layout).