It is debatable whether apes can reason about the unobservable properties of tools. We tested orangutans for this ability with a range of tool tasks that they could solve by using observational cues to infer tool functionality. In experiment 1, subjects successfully chose an unbroken tool over a broken one when each tool's middle section was hidden. This prevented seeing which tool was functional but it could be inferred by noting the tools' visible ends that were either disjointed (broken tool) or aligned (unbroken tool). We investigated whether success in experiment 1 was best explained by inferential reasoning or by having a preference per se for a hidden tool with an aligned configuration. We conducted a similar task to experiment 1 and included a functional bent tool that could be arranged to have the same disjointed configuration as the broken tool. The results suggested that subjects had a preference per se for the aligned tool by choosing it regardless of whether it was paired with the broken tool or the functional bent tool. However, further experiments with the bent tool task suggested this preference was a result of additional demands of having to attend to and remember the properties of the tools from the beginning of the task. In our last experiment, we removed these task demands and found evidence that subjects could infer the functionality of a broken tool and an unbroken tool that both looked identical at the time of choice.