Optical stylus interaction techniques are described. In an implementation, a display of a computing device includes optical sensors capable of detecting images projected by a stylus. A stylus may include a projection system to project various images used to convey interaction information that may be interpreted by the computing device. Based on recognition of different projected images, a context for interaction of the stylus may be ascertained and corresponding operations may be performed by the computing device. This may include resolving a spatial position of the stylus relative to the display device as well as movement of the stylus and images that defines various stylus-based gestures. In addition, the environment for optical stylus interaction enables a writing mode that emulates natural writing by mapping different projectable images to changes in pressure applied to the stylus when in contact with the display.