Abstract: Transparency can be used to increase the visibility of a user's workspace in situations where the space is obscured by floating windows and tool palettes. Dynamic transparency takes this approach further by making components more transparent when the user's cursor is far away. However, dynamic transparency may make palettes and floating windows more difficult to target. We carried out a study to test the effects of different types of dynamic transparency on targeting performance. We found that although targeting time does increase as targets become more transparent, the increases are small - often less than ten percent. Our study suggests reasonable maximum, minimum, and default transparency levels for designers of dynamic transparency schemes.