Industrial augmented reality (IAR) is one of the key pillars of the industrial digitalisation concepts, which connects workers with the physical world through overlaying digital information. Augmented reality (AR) market is increasing but still its adoption levels are low in industry. While companies strive to learn and adopt AR, there are chances that they fail in such endeavours due to lack of understanding key challenges and success factors in this space. This study identifies critical success factors and challenges for IAR implementation projects based on field experiments. The broadly used technology, organisation, environment (TOE) framework was used as a theoretical basis for the study, while 22 experiments were conducted for validation. It is found that, while technological aspects are of importance, organisational issues are more relevant for industry, which has not been reflected to the same extent in the literature.