Sequential abductive reasoning is the process of finding the best explanation for a set of observations. Explanations can be multicausal and require the retrieval of previously found ones from memory. The theory of abductive reasoning (TAR) allows detailed predictions on what information is stored and retrieved from memory during reasoning. In the research to date, however, these predictions have never been directly tested. In the present study, we tested process assumptions such as the construction of a mental representation from TAR using memory indexing, an eye-tracking method that makes it possible to trace the retrieval of explanations currently held in working memory. Gaze analysis revealed that participants encode the presented evidence (i.e., observations) together with possible explanations into memory. When new observations are presented, the previously presented evidence and explanations are retrieved. Observations that are not explained immediately are encoded as abstractly explained. Abstract explanations enter a refinement process in which they become concrete before they enter the situation model. With the memory indexing method, we were able to assess the process of information retrieval in abductive reasoning, which was previously believed to be unobservable. We discuss the results in the light of TAR and other current theories on the diagnostic reasoning process.