Social life hinges on the ability to infer others' mental states. By default, people often recruit self-knowledge during social inference, particularly for others who are similar to oneself. How do people's active perspective-taking efforts-deliberately imagining another's perspective-affect self-knowledge use? In 2 experiments, we test the flexible self-application hypothesis: that the application of self-knowledge to a perspective-taking target differs based on that person's similarity to oneself. We found consistent evidence that, when making inferences about dissimilar others, perspective taking increased the projection of one's own traits and preferences to those targets, relative to a control condition. When making inferences about similar others, however, perspective taking decreased projection. These findings suggest that self-target similarity critically shapes the inferential processes triggered by active perspective-taking efforts.