People who understand mechanical systems can infer the principles of operation of an unfamiliar device from their knowledge of the device's components and their mechanical interactions. Individuals vary in their ability to make this tjrpe of inference. This paper describes studies of performance in psychometric tests of mechanical ability. Based on subjects' retrospective protocols and response patterns, it was possible to identify rules of mechanical reasoning which accounted for the performance of subjects who differ in mechanical ability. The rules are explicitely stated in a simulation model which demonstrates the sufficiency of the rules by producing the kinds of responses observed in the subjects. Three factors are proposed as the sources of individual differences in mechanical ability: <1| ability to correctly identify which attributes of a system are relevant to its mechanical function, (2) ability to use rules consistently, and (3| ability to quantitatively combine information about two or more relevant attributes.