The term ‘moral wiggle room’ (MWR) is often used to describe features of social situations that reduce the transparency between behaviors and their consequences. Previous research found that MWR decreases the likelihood of prosocial behavior and inferred that prosocial behavior is driven not only by genuine prosocial preferences but also by the desire to appear prosocially. Unfortunately, this postulation has never been specified as a theory. Consequently, studies testing the MWR effect reveal substantial heterogeneity in the understanding of core concepts, their operationalizations, and boundary conditions. To advance the field of MWR research, we remove these ambiguities by providing a verbal proposition-based theory specification. We first outline the original formulation of the MWR effect and its mediating mechanism, and we identify its loopholes. On this basis, we propose, refine, and distinguish between core propositions and auxiliary assumptions as well as relevant concepts and their operationalizations. The result is a fully testable theory of MWR (MWR-T) that includes a sharpened concept of MWR, distinguishes between three underlying psychological mechanisms of the behavioral MWR effect (i.e., anticipated social image damage, perceived social norms, and anticipatory guilt), and takes into account the role of individual differences in susceptibility to MWR (i.e., the joint effect of dispositional other-regarding preferences and social image concerns). Lastly, we relate MWR-T to existing theories and draw a roadmap for future work. With our contribution, we hope to stimulate more rigorous research on MWR and provide an example of the utility of verbal proposition-based theory specification.