The ability to generalize from the known to the unknown is central to learning and inference. Two experiments explore the relationship between how a property is explained and how that property is generalized to novel species and artifacts. The experiments contrast the consequences of explaining a property mechanistically, by appeal to parts and processes, with the consequences of explaining the property functionally, by appeal to functions and goals. The findings suggest that properties that are explained functionally are more likely to be generalized on the basis of shared functions, with a weaker relationship between mechanistic explanations and generalization on the basis of shared parts and processes. The influence of explanation type on generalization holds even though all participants are provided with the same mechanistic and functional information, and whether an explanation type is freely generated (Experiment 1), experimentally provided (Experiment 2), or experimentally induced (Experiment 2). The experiments also demonstrate that explanations and generalizations of a particular type (mechanistic or functional) can be experimentally induced by providing sample explanations of that type, with a comparable effect when the sample explanations come from the same domain or from a different domains. These results suggest that explanations serve as a guide to generalization, and contribute to a growing body of work supporting the value of distinguishing mechanistic and functional explanations.