People's causal judgments are susceptible to the action effect, whereby they judge actions to be more causal than inactions. We offer a new explanation for this effect, the counterfactual explanation: people judge actions to be more causal than inactions because they are more inclined to consider the counterfactual alternatives to actions than to consider counterfactual alternatives to inactions. Experiment 1a conceptually replicates the original action effect for causal judgments. Experiment 1b confirms a novel prediction of the new explanation, the reverse action effect, in which people judge inactions to be more causal than actions in overdetermination cases. Experiment 2 directly compares the two effects in joint-causation and overdetermination scenarios and conceptually replicates them with new scenarios. Taken together, these studies provide support for the new counterfactual explanation for the action effect in causal judgment.