We make errors when learning to use a new tool. However, the cause of error may be ambiguous: is it because we misestimated properties of the tool or of our own arm? We considered a well-studied adaptation task in which people made goal-directed reaching movements while holding the handle of a robotic arm. The robot produced viscous forces that perturbed reach trajectories. As reaching improved with practice, did people re-calibrate an internal model of their arm, or did they build an internal model of the novel tool (robot), or both? What factors influenced how the brain solved this credit assignment problem? To investigate these questions, we compared transfer of adaptation between three conditions: catch trials in which robot forces were turned off unannounced, robot-null trials in which subjects were told that forces were turned off, and free-space trials in which subjects still held the handle but watched as it was detached from the robot. Transfer to free-space was 40% of that observed in unannounced catch trials. We next hypothesized that transfer to free-space might increase if the training field changed gradually, rather than abruptly. Indeed, this method increased transfer to free-space from 40 to 60%. Therefore, while practice with a novel tool resulted in formation of an internal model of the tool, it also appeared to produce a transient change in the internal model of the subject's arm. Gradual changes in the tool's dynamics increased the extent to which the nervous system recalibrated the model of the subject's own arm.