When making moral judgments of past actions, adults often think counterfactually about what could have been done differently. Considerable evidence suggests that counterfactual thinking emerges around age 6, but it remains unknown how this development influences children's moral judgments. Across two studies, Australian children aged 4–9 (N = 236, 142 Females) were told stories about two characters who had a choice that led to a good or bad outcome, and two characters who had no choice over a good or bad outcome. Results showed that 4- and 5-year-olds’ moral judgments were influenced only by the actual outcome. From age 6, children's moral judgments were also influenced by the counterfactual choices that had been available to the characters.