Combining interactive technology with traditional toys promises to significantly enhance the educational value of children's play. Designing such augmented toy environments, however, requires designers to take both the traditional, technology-less nature of the toy, and the novel interactive aspects of the newly accessible virtual environment into account. This article attempts to present a unified set of guidelines for the design and implementation of augmented toy environments, drawing upon existing literature in traditional and educational toy and game design, as well as our own experiences in building mixed reality game environments. We also offer practical advice on the use of these guidelines by reporting on our own augmented toy environment for young children, called the Augmented Knight's Castle, which encourages learning about the Middle Ages in a playful way.