The purpose of this study is to demonstrate detailed processes of applying the social science philosophy of critical realism (CR) to educational research design in practice. For this, this study explores the key ontological concepts of CR, and then relates them to the purpose of critical realism studies, that is, to explain unobservable transfactual structure and generative mechanisms underlying certain educational phenomena. Accordingly, CR argues for retroduction as a main inference mode, which in turn informs the design of empirical studies. Lastly, this article illustrates hands-on practices of research design applying (abduction and) retroduction to the study of developing a conceptual model of relational teacher agency based on CR (Lee et al., 2021). This study contributes to highlighting the inextricable links between ontology, research aims, inference modes, and research design, which is a neglected scholarly issue in educational research methodologies. In particular, this study highlights the distinctions between critical realism and pragmatism.