A key computation in building adaptive internal models of the external world is to ascribe sensory signals to their likely cause(s), a process of Bayesian Causal Inference (CI). CI is well studied within the framework of two-alternative forced-choice tasks, but less well understood within the cadre of naturalistic action-perception loops. Here, we examine the process of disambiguating retinal motion caused by self- and/or object-motion during closed-loop navigation. First, we derive a normative account specifying how observers ought to intercept hidden and moving targets given their belief over (i) whether retinal motion was caused by the target moving, and (ii) if so, with what velocity. Next, in line with the modeling results, we show that humans report targets as stationary and steer toward their initial rather than final position more often when they are themselves moving, suggesting a misattribution of object-motion to the self. Further, we predict that observers should misattribute retinal motion more often: (i) during passive rather than active self-motion (given the lack of an efference copy informing self-motion estimates in the former), and (ii) when targets are presented eccentrically rather than centrally (given that lateral self-motion flow vectors are larger at eccentric locations during forward self-motion). Results confirm both of these predictions. Lastly, analysis of eye-movements show that, while initial saccades toward targets are largely accurate regardless of the self-motion condition, subsequent gaze pursuit was modulated by target velocity during object-only motion, but not during concurrent object- and self-motion. These results demonstrate CI within action-perception loops, and suggest a protracted temporal unfolding of the computations characterizing CI.