Our goal in this paper is to experimentally investigate whether folk conceptions of explanation are psychologistic. In particular, are people more likely to classify speech acts as explanations when they cause understanding in their recipient? The empirical evidence that we present suggests this is so. Using the side-effect effect as a marker of mental state ascriptions, we argue that lay judgments of explanatory status are mediated by judgments of a speaker’s and/or audience’s mental states. First, we show that attributions of both understanding and explanation exhibit a side-effect effect. Next, we show that when the speaker’s and audience’s level of understanding is stipulated, the explanation side-effect effect goes away entirely. These results not only extend the side-effect effect to attributions of understanding, they also suggest that attributions of explanation exhibit a side-effect effect because they depend upon attributions of understanding, supporting the idea that folk conceptions of explanation are psychologistic.