Primates interpret conspecific behaviour as goal-directed and expect others to achieve goals by the most efficient means possible. While this teleological stance is prominent in evolutionary and developmental theories of social cognition, little is known about the underlying mechanisms. In predictive models of social cognition, a perceptual prediction of an ideal efficient trajectory would be generated from prior knowledge against which the observed action is evaluated, distorting the perception of unexpected inefficient actions. To test this, participants observed an actor reach for an object with a straight or arched trajectory on a touch screen. The actions were made efficient or inefficient by adding or removing an obstructing object. The action disappeared mid-trajectory and participants touched the last seen screen position of the hand. Judgments of inefficient actions were biased toward the efficient prediction (straight trajectories upward to avoid the obstruction, arched trajectories downward towards the target). These corrections increased when the obstruction’s presence/absence was explicitly acknowledged, and when the efficient trajectory was explicitly predicted. Additional supplementary experiments demonstrated that these biases occur during on-going visual perception and/or immediately after motion offset. The teleological stance is at least partly perceptual, providing an ideal reference trajectory against which actual behaviour is evaluated.