Interactions between a virtual actor and its virtual environment involve many aspects. An important one is hand interactions. In a virtual scene depicting everyday life, the actor will need to grasp and hold objects, in such a way that both skeleton motion and body deformation have a realistic visual aspect. It will also need to interact with other virtual actors sharing the same virtual world, shaking hands when meeting for example. The authors present an efficient and realistic method combining automatic hand motion generation with hand deformation simulation. The resulting system is integrated in an interactive human simulation application. It adds the ability to simulate hand interactions between actors and their environment, in combination with traditional human animation techniques. The skeleton is animated by a heuristic motion control and multi-sensor based technique. The final free-form surface hand model is produced by a three-layer deformation model. The intermediate muscular layer is based on a geometric deformation tool, where deformations are considered as interpolating control point displacements