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We propose a two-handed direct manipulation system to achieve complex volume segmentation of CT/MRI data in Augmented Reality with a remote controller attached to a motion tracking cube. At the same time segmented data is displayed by direct volume rendering using a programmable GPU. Our system achieves visualization of real time modification of volume data with complex shading including transparency control by changing transfer functions, displaying any cross section, and rendering multi materials using a local illumination model. Our goal is to build a system that facilitates direct manipulation of volumetric CT/MRI data for segmentation in Augmented Reality. Volume segmentation is a challenging problem and segmented data has an important role for visualization and analysis.