Therapist reasoning in case formulation construction was investigated. Sixty-five psychodynamic or cognitive-behavioral therapists classified as experts, experienced, or novices generated "think aloud" formulations based on six standardized vignettes. Formulations were reliably transcribed, segmented into idea units, and content coded. ANOVA and sequential analysis compared formulation content and reasoning processes. Expert formulations contained more descriptive, diagnostic, inferential, and treatment planning information. They focused more on given and inferred symptoms, on adult relationship history, on inferred psychological mechanisms, on the need for further evaluation, and on plans to focus on treatment expectations and symptoms. They exhibited more forward (inferential) than backward (deductive) reasoning and, compared with non-experts, they exhibited more forward and backward reasoning. Results are discussed in terms of cognitive science models for expert problem solving and on implications for psychotherapy training, practice, and research.