There is considerable evidence for the role of internal models of the body’s dynamics in the control of movement. However, the existence of internal models of the environment is less well established. The present work provides further evidence of the existence of sophisticated internal models of the structure of the environment. We suggest that such models are used to predict upcoming events and plan movements in anticipation of those events. We recorded eye, head, and hand movements while subjects caught balls thrown with a bounce. Subjects initially fixate the hands of the thrower, then saccade to the anticipated bounce point, and then pursue the ball until it is close to the hands. However, ability to pursue the ball depends on experience with the ball’s dynamic properties. When the ball was unexpectedly replaced with a more elastic ball, subjects were unable to track the ball, and instead made a series of saccades. Within 2 or 3 trials, subjects were once again able to accurately pursue the ball. Subjects displayed a different pattern of movements when throwing or watching other players. The observer's head movements from thrower towards the catcher often begin as much as half a sec before the ball leaves the thrower’s hands. All these observations suggest that observers position their bodies in anticipation of expected events, in order to gather critical information. In addition, they suggest that observers maintain an internal model of the dynamic properties of the world, and rapidly update this model when errors occur.