Children do not necessarily disbelieve a speaker with a history of inaccuracy; they take into account reasons for errors. Three- to five-year-olds (N = 97) aimed to identify a hidden target in collaboration with a puppet. The puppet's history of inaccuracy arose either from false beliefs or occurred despite his being fully informed. On a subsequent test trial, children's realistic expectation about the target was contradicted by the puppet who was fully informed. Children were more likely to revise their belief in line with the puppet's assertion when his previous errors were due to false beliefs. Children who explained this puppet's prior inaccuracy in terms of false belief were more likely to believe the puppet than those who did not. As children's understanding of the mind advances, they increasingly balance the risk of learning falsehoods from unreliable speakers against that of rejecting truths from speakers who made excusable errors.