Understanding irrational actions may require the observer to make mental state inferences about why an action was performed. Individuals with autism spectrum conditions (ASC) have well documented difficulties with mentalizing; however, the degree to which rationality understanding is impaired in autism is not yet clear. The present study uses eye-tracking to measure online understanding of action rationality in individuals with ASC. Twenty adults with ASC and 20 typically developing controls, matched for age and IQ watched movies of rational and irrational actions while their eye movements were recorded. Measures of looking time, scan path and saccade latency were calculated. Results from looking time and scan path analyses demonstrate that participants with ASC have reduced visual attention to salient action features such as the action goal and the hand performing the action, regardless of action rationality. However, when participants with ASC do attend to these features, they are able to make anticipatory goal saccades as quickly as typically developing controls. Taken together these results indicate that individuals with autism have reduced attention to observed actions, but when attention is maintained, goal prediction is typical. We conclude that the basic mechanisms of action understanding are intact in individuals with ASC although there may be impairment in the top-down, social modulation of eye movements.