An interactive animation system is presented for constructing layered character models with simulated elastic components. The system, called LEMAN (Layered Elastic Model ANimation), allows three-dimensional animated characters to be built up from successive layers of skeleton, muscle, fat and skin in a completely interactive, direct-manipulation environment, using a variety of input devices. Using an artist's anatomical approach, the character is represented as a simulated elastically deformable skin surface which is wrapped around a kinematically modeled articulated figure. It may then be animated by moving the underlying articulated figure, either interactively using forward or inverse kinematics, or by interpolating a sequence of key postures. Once a motion sequence has been specified, the entire simulation can be recalculated at a higher surface resolution for better visual results. Although the system is most practical for animating relatively simple cartoon-like characters, the realistic-looking shapes and movements resulting from the physical simulation make it well-suited for research into naturalistic human and animal animation.