Abstract Conventional decoding methods in neuroscience aim to predict discrete brain states from multivariate correlates of neural activity. This approach faces two important challenges. First, a small number of examples are typically represented by a much larger number of features, making it hard to select the few informative features that allow for accurate predictions. Second, accuracy estimates and information maps often remain descriptive and can be hard to interpret. In this paper, we propose a model-based decoding approach that addresses both challenges from a new angle. Our method involves (i) inverting a dynamic causal model of neurophysiological data in a trial-by-trial fashion; (ii) training and testing a discriminative classifier on a strongly reduced feature space derived from trial-wise estimates of the model parameters; and (iii) reconstructing the separating hyperplane. Since the approach is model-based, it provides a principled dimensionality reduction of the feature space; in addition, if the model is neurobiologically plausible, decoding results may offer a mechanistically meaningful interpretation. The proposed method can be used in conjunction with a variety of modelling approaches and brain data, and supports decoding of either trial or subject labels. Moreover, it can supplement evidence-based approaches for model-based decoding and enable structural model selection in cases where Bayesian model selection cannot be applied. Here, we illustrate its application using dynamic causal modelling (DCM) of electrophysiological recordings in rodents. We demonstrate that the approach achieves significant above-chance performance and, at the same time, allows for a neurobiological interpretation of the results.