An extensively revised heuristic-analytic theory of reasoning is presented incorporating three principles of hypothetical thinking. The theory assumes that reasoning and judgment are facilitated by the formation of epistemic mental models that are generated one at a time (singularity principle) by preconscious heuristic processes that contextualize problems in such a way as to maximize relevance to current goals (relevance principle). Analytic processes evaluate these models but tend to accept them unless there is good reason to reject them (satisficing principle). At a minimum, analytic processing of models is required so as to generate inferences or judgments relevant to the task instructions, but more active intervention may result in modification or replacement of default models generated by the heuristic system. Evidence for this theory is provided by a review of a wide range of literature on thinking and reasoning.