The objective of this study was to explore factors that affect the difficulty of counterfactual reasoning in 3-5-year-old children and to shed light on the reason why counterfactual reasoning relates to understanding false belief [Cognitive Development, 13 (1998) 73-90]. Using travel scenarios, the difference between simple scenarios, in which each departure point led to exactly one destination, and complex scenarios, in which each of the departure points was cross-connected with all destination points, proved very important. In simple scenarios even 3 1/2-year olds gave 75% correct answers to counterfactual questions, a level achieved on complex scenarios a year, and on false belief questions, irrespective of scenario, 1 1/2 years later. Since simple scenarios require the same kind of reasoning as complex scenarios, this calls into question the suggestion by Peterson and Riggs [Mind & Language 14 (1999) 80-112] that modified derivation is the common denominator for answering counterfactual questions and questions about false belief.