Children’s understanding of narrative fables was examined. Students learning two languages (Spanish and English) and monolingual English students in kindergarten through fifth/sixth grades were presented with modified versions of Aesop’s fables. Three tasks, each of which assessed somewhat different aspects of comprehension, were used: retelling the fables, responding to questions about the motives of the fable characters, and extracting a lesson from the fable. Bilingual program participants included students whose primary language is Spanish and students whose primary language is English. All three comprehension tasks provided evidence for transfer of prior knowledge across first and second language inputs. There was also a direct, positive relationship between performance in the first and in the second language. Comparisons with the monolingual students indicated that there was no difference in the developmental course of fable understanding. Discussion focuses on implications for instructional practices and language proficiency assessment.