As we navigate through life we instinctively model time as having a flowing present that divides a fixed past from open future. This model develops in childhood and is deeply saturated within our language, thought and behavior, affecting our conceptions of the universe, freedom and the self. Yet as central as it is to our lives, physics seems to have no room for this flowing present. What Makes Time Special? demonstrates this claim in detail and then turns to two novel positive tasks. First, by looking at the world "sideways" - in the spatial directions — it shows that physics is not "spatializing time" as is commonly alleged. Even relativity theory makes significant distinctions between the spacelike and timelike directions, often with surprising consequences. Second, if the flowing present is an illusion, it is a deep one worthy of explanation. The author develops a picture whereby the temporal flow arises as an interaction effect between an observer and the physics of the world. Using insights from philosophy, cognitive science, biology, psychology and physics, the theory claims that the flowing present model of time is the natural reaction to the perceptual and evolutionary challenges thrown at us. Modeling time as flowing makes sense even if it misrepresents it.