Plato wonders why a good God might allow the existence of evil. This problem is especially pertinent to his dialogue Timaeus, in which Plato describes the creation of the cosmos by a benevolent divine craftsman called the Demiurge. A justification for why God allows evil to exist is called a theodicy. Readers of the Timaeus have interpreted the theodicy of this dialogue in many ways. After showing the shortcomings of some common interpretations, I offer a largely original interpretation of the theodicy of the Timaeus. I claim that in the Timaeus evil is caused by conflict between souls, and this conflict is something that the good (but not omnipotent) Demiurge could not avoid. However, I think that Plato’s Demiurge may have made the best of this imperfect situation by placing souls in a cycle of reincarnation that functions as a rehabilitative punishment, and thereby ordering the cosmos for their redemption.