Counterfactual thoughts refer to alternatives to the past. Episodic counterfactual thoughts have in past research been shown to be primarily goal-directed and to engender performance improvement. Some past research supports this perspective with the observation that episodic counterfactuals center mostly on controllable action, whereas other research does not show this. We offer a theoretical resolution for these discrepant findings centering on the role of self-initiation, such that counterfactuals more often focus on internally controllable action to the extent that the circumstance is one that was self-initiated rather than initiated by others. In doing so, we disambiguate two dimensions of causal explanation: locus (self vs. other) and controllability (high vs. low) that previous studies conflated, demonstrating that variation as a function of self-initiation in the content of episodic counterfactuals occurs primarily along the former but not the latter dimension. These results support the functional theory of counterfactual thinking.