This article proposes a model of the reader's understanding of the points of simple narrative texts, such as fables, and tests this model by using point generation and fable comprehension data from adult subjects. The model identifies three components necessary for understanding the fable's moral or point: (a) the positive or negative valence of the central action in the fable, (b) the positive or negative valence of the fable's outcome, and (c) the consistency in valence between action and outcome information. The model was tested by having subjects read traditional Aesop's fables and three types of experimental fables written to be inconsistent with the proposed fable schema. The data showed strong support for the theory. Readers had considerable difficulty deriving points for texts that were inconsistent with the proposed schema, and, in those cases in which the data were not in agreement with the predictions, it was possible to use components of the model to provide an account of the basic findings.