The field of narrative (or story) understanding and generation is one of the oldest in natural language processing (NLP) and artificial intelligence (AI), which is hardly surprising, since storytelling is such a fundamental and familiar intellectual and social activity. In recent years, the demands of interactive entertainment and interest in the creation of engaging narratives with life-like characters have provided a fresh impetus to this field. This book provides an overview of the principal problems, approaches, and challenges faced today in modeling the narrative structure of stories. The book introduces classical narratological concepts from literary theory and their mapping to computational approaches. It demonstrates how research in AI and NLP has modeled character goals, causality, and time using formalisms from planning, case-based reasoning, and temporal reasoning, and discusses fundamental limitations in such approaches. It proposes new representations for embedded...