The thesis of this article is that reactions to misfortunes are often biased by the counterfactual fallacy: the tendency to view events that can easily be imagined otherwise as events that ought not to have been. Drawing upon a diverse set of empirical findings we demonstrate that victims’ and observers’ reactions to misfortunes depend on the extent to which the event prompts them to generate counterfactual thoughts or images of more positive alternatives. We discuss the factors that determine the ease with which a negative event can be imagined otherwise, along with their relevance to a variety of justice-relevant responses, including perceptions of deservingness, recommendations for compensation, and blame assignment.