The paper presents and discusses the distinction between inductive and deductive System Dynamics modeling. Findings are that the distinction between inductive and deductive modeling is helpful in appropriately setting up, conducting, and evaluating System Dynamics projects. The discussion is based on a literature review, conceptual considerations, and the insights gained from case studies, both within business and academia. Implications are different processes, different potential outcomes, and different possibilities for implementation for the two modeling approaches. The value of the paper lies in a new perspective on the most relevant question, why some System Dynamics projects thrive while others fail.