Two experiments provide evidence that preschoolers selectively infer history when explaining outcomes and infer past events that could have plausibly happened. In Experiment 1, thirty‐three 3‐year‐olds and thirty‐six 4‐year‐olds explained why a character owns or likes certain objects. In Experiment 2, thirty‐four 4‐year‐olds and thirty‐six 5‐year‐olds explained why a character either owns or is using the objects. Children aged 4 and 5 years, but not 3 years, inferred history when explaining ownership, but not when explaining liking or use. They also tailored their explanations to reflect likelihood, allowing them to infer plausible past events. These findings are informative about the development of children's ability to infer history in their explanations and also suggest that preschoolers appreciate that ownership depends on past investment.