Well‐functioning agents ordinarily have an excellent epistemic relationship to their intentional actions. This phenomenon is often characterized as knowledge of what one is doing and labeled “practical knowledge”. But when we examine it carefully, it seems to require a particular kind of understanding ‐ understanding of the normative structure of one's action. Three lines of argument are offered to support this Necessity of Understanding thesis. The first appeals to the nature of intentional action and the second to our everyday reasons (...) explanation of action. The final line of argument draws on a practical amnesia case in which an agent forgets her overall goal while acting. Implications of the Necessity of Understanding thesis for the widely endorsed non‐observational view of practical knowledge are briefly discussed. It is argued that support for the non‐observational view is weaker than has been appreciated. (shrink)