This study compares the effect of Augmented Reality (AR) based virtual manipulatives to physical manipulatives for teaching geometric shapes to preschool children to improve their spatial skills. A quasi-experimental research design was utilized in order to answer the research questions. The context of the research was a public primary school in Turkey with 72 preschool children, ages ranging from five to six. As the treatment, while the experimental group used tablet computers with AR applications, the control group used physical manipulatives for performing similar activities over a four-week application. Two spatial ability tests were conducted as pre-test and post-test. The results showed a statistically significant difference in the preschool children's spatial ability test scores in favor of the experimental group.