This paper describes TAO, a system for sound synthesis by physical modelling based on a new technique called cellular sound synthesis (CSS). The system provides a general mechanism for constructing an infinite variety of virtual instruments, and does so by providing a virtual acoustic material, elastic in nature, whose physical characteristics can be fine-tuned to produce different timbres. A wide variety of sounds such as plucked, hit, bowed and scraped sounds can be produced, all having natural physical and spacial qualities. Some of the musical and philosophical issues considered to be most important during the design and development of the system are touched upon, and the main features of the system are explained with reference to practical examples. Advantages and disadvantages of the synthesis technique and the prototype system are discussed, together with suggestions for future improvements.