How do people evaluate causal relationships? Do they just consider what actually happened, or do they also consider what could have counterfactually happened? Using eye tracking and Gaussian process modeling, we investigated how people mentally simulated past events to judge what caused the outcomes to occur. Participants played a virtual ball‐shooting game and then—while looking at a blank screen—mentally simulated (a) what actually happened, (b) what counterfactually could have happened, or (c) what caused the outcome to happen. Our findings showed (...) that participants moved their eyes in patterns consistent with the actual or counterfactual events that they mentally simulated. When simulating what caused the outcome to occur, participants moved their eyes consistent with simulations of counterfactual possibilities. These results favor counterfactual theories of causal reasoning, demonstrate how eye movements can reflect simulation during this reasoning and provide a novel approach for investigating retrospective causal reasoning and counterfactual thinking. (shrink)