In Chapter 5, we discuss the processing components that underlie the perspective-taking analogy that we articulated in Chapter 2. This analysis makes it clear that the retrieval of personal knowledge and experience is critical, and we review some of what is known about episodic retrieval and how it can be used in this context. In forming an analogy, one must be able to identify how elements of the story world are related to corresponding elements in one’s own experience. To understand this process, we discuss how readers must construct similarity relations. Finally, we discuss the mechanics of analogy formation per se and describe the notion of a structural mapping between the reader and the character that underlies the perspective-taking analogy. We close out Chapter 5 with a discussion of perspective-taking dynamics. This includes an illustration of how perspective taking can be driven by the events of the story world or evaluations of the character. As we make clear, perspective taking is an ongoing process that can unfold in a variety of ways over the course of reading a narrative.