This study aimed to identify the neural basis of probabilistic reasoning, a type of inductive inference that aids decision making under conditions of uncertainty. Fight normal subjects performed two separate two-alternative-choice tasks (the balls in a bottle and personality survey tasks) while undergoing functional magnetic resonance imaging (fMRI). The experimental conditions within each task were chosen so that they differed only in their requirement to make a decision under conditions of uncertainty (probabilistic reasoning and frequency determination required) or under conditions of certainty (frequency determination required). The same visual stimuli and motor responses were used in the experimental conditions. We provide evidence that the neo-cerebellum, in conjunction with the premotor cortex, inferior parietal lobule and medial occipital cortex, mediates the probabilistic inferences that guide decision making under uncertainty. We hypothesise that the neo-cerebellum constructs internal working models of uncertain events in the external world, and that such probabilistic models subserve the predictive capacity central to induction. (C) 2004 Elsevier B.V. All rights reserved.