The chapter presents a transformation-rule model for predicting others' thoughts and feelings and presents several studies to support it. Individual differences in role taking refer to differences in the tendency to undertake the predictive process, differences in the hierarchies of transformation rules, differences in the knowledge base that is used to make specific predictions, and differences in the ability to integrate information from declarative knowledge structures. There is nothing inherent to either children's or adults' cognitive capacities to prevent them from using all modes of making predictions about others' thoughts and feelings. Speaking of egocentrism or of the inability to engage in role, taking leads to a circularity that is avoided by the transformation-rule model. This model allows to assess where failures in predictive ability may lie, because the model yields explicit hypotheses about the way individuals make predictions regarding others' episodic psychological experiences. Such hypotheses are not derivable from other models, and, as demonstrated with respect to the integration of declarative knowledge, the model can be used to account parsimoniously for previous data and to interpret research in a way that is not possible from other formulations.