Einstellung (mental set) effects designate the phenomenon where established routines can prevent people from finding other, possibly more efficient solutions. Here we investigate the mechanism behind this phenomenon by using Luchins’ classical water jug paradigm with concurrent verbalization. We find no difference in the extent of the Einstellung effect between the group which was instructed to think aloud during the problem solving and the group which was thinking silently. The think-aloud protocols indicate that the participants who exhibited the Einstellung effect repeatedly attempted to solve the water jug problem by using variations of the previously successful method which had been rendered inappropriate in the final problem. Our study underlines the usefulness of the think-aloud technique in tracking the cognitive processes. More importantly, it demonstrates how, once thought has been activated, it may bias subsequent dealings with new situations, even in the face of repeated failure that people experience in the Einstellung situations.