Others’ internal qualities (e.g. dispositions, attitudes) are not directly observable so we must infer them from behavior. Classic attribution theories agree that we consider both internal qualities and situational pressure when making these judgments. However, one of the most well known ideas in psychology is that social judgments are biased, and we tend to underestimate the pressure that situations exert and overestimate the influence of disposition (known as the Fundamental Attribution Error). We propose that the social judgments made in classic studies of attribution have been interpreted as biased only because they have been compared to an inappropriate benchmark of rationality predicated on the assumption of deterministic dispositions and situations. We show that these results are actually consistent with the behavior of a simple ideal Bayesian observer who must reason about uncertain and probabilistic influences of situations and dispositions.