PACER is a gesture-based interactive paper system that supports fine-grained paper document content manipulation through the touch screen of a cameraphone. Using the phone’s camera, PACER links a paper document to its digital version based on visual features. It adopts camera-based phone motion detection for embodied gestures (e.g. marquees, underlines and lassos), with which users can flexibly select and interact with document details (e.g. individual words, symbols and pixels). The touch input is incorporated to facilitate target selection at fine granularity, and to address some limitations of the embodied interaction, such as hand jitter and low input sampling rate. This hybrid interaction is coupled with other techniques such as semi-real time document tracking and loose physical-digital document registration, offering a gesture-based command system. We demonstrate the use of PACER in various scenarios including work-related reading, maps and music score playing. A preliminary user study on the design has produced encouraging user feedback, and suggested future research for better understanding of embodied vs. touch interaction and one vs. two handed interaction.