Theories of induction in psychology and artificial intelligence assume that the process leads from observation and knowledge to the formulation of linguistic conjectures. This paper proposes instead that the process yields mental models of phenomena. It uses this hypothesis to distinguish between deduction, induction, and creative forms of thought. It shows how models could underlie inductions about specific matters. In the domain of linguistic conjectures, there are many possible inductive generalizations of a conjecture. In the domain of models, however, generalization calls for only a single operation: the addition of information to a model. If the information to be added is inconsistent with the model, then it eliminates the model as false: this operation suffices for all generalizations in a Boolean domain. Otherwise, the information that is added may have effects equivalent (a) to the replacement of an existential quantifier by a universal quantifier, or (b) to the promotion of an existential quantifier from inside to outside the scope of a universal quantifier. The latter operation is novel, and does not seem to have been used in any linguistic theory of induction. Finally, the paper describes a set of constraints on human induction, and outlines the evidence in favor of a model theory of induction.