Mimicry and imitation are crucial mechanisms of social learning and rapport. Further, mimicry informs essential social judgments formed not only by the interacting party but also by third-party observers. How sophisticated are observer’s inferences from mimicry? We examined this in the context of observers’ use of mimicry to judge trustworthiness. Participants observed a dyadic interaction in which a target mimicked or did not mimic a model. Prior to observation, the model’s honesty was earlier defamed, or praised, in front of some, but not other, targets. Observers always knew the model’s reputation. Observers also knew which targets were aware of the model’s reputation. Results suggest that observers’ use of mimicry in trust judgments is very sophisticated It reflects not just the presence of mimicry, but also the model’s moral reputation and, critically, knowledge of the target’s awareness of the model’s reputation. This sophistication leads observers to rate targets as trustworthy when they mimic untrustworthy models, but only when the observers know that the model reputation is unknown to the target.