What factors contribute to hindsight bias, the phenomenon whereby the known outcome of an event appears obvious only after the fact? The Causal Model Theory (CMT) of hindsight bias (Nestler et al. in Soc Psychol 39:182-188, 2008a; in J Expl Psychol: Learn Mem Cog 34:1043-1054, 2008b; Pezzo in Mem 11:421-441, 2003; Wasserman et al. in Pers Soc Psychol Bull 17:30-35, 1991) posits that hindsight bias can occur when people have the opportunity to identify potential causal antecedents and evaluate whether they could have led to the outcome. Two experiments incorporating highly controlled minimalist scenarios supported the CMT. As predicted by the CMT, hindsight bias occurred when the causal factor explained the actual outcome better than the alternative outcome, and reverse hindsight bias occurred when the causal factor explained the alternative outcome better than the actual outcome. Moreover, we found new evidence that outcome knowledge alone was insufficient to elicit hindsight bias in the absence of a potential causal antecedent. Implications for future directions in hindsight bias research are discussed.