This paper describes, Napkin Sketch, a novel 3D sketching interface which attempts to mimic the qualities of conventional sketching medium and tools both in terms of physical properties and interaction experience. A portable tablet PC is used as the sketching platform, and mixed reality techniques are employed to allow 3D sketches to be created on top of a physical napkin. Intuitive manipulation and navigation within the 3D design space is achieved by visually tracking the tablet PC with a camera and mixed reality markers. For sketch input, we improve upon the projective 3D sketching approach with a one stroke plane creation technique. This coupled with the hardware interface produces a fluid and freeform sketching experience. Sketch recognition is also integrated as an alternative method for 3D sketch input, providing users the ability to quickly instance existing 3D models.