This study investigated narrative abilities and their relation to theory of mind in autistic and mentally retarded subjects, who were matched for their linguistic competence on standardized measures of comprehension and production. We asked 27 autistic, 27 mentally retarded, and 17 normal subjects (whose age range matched the verbal mental age ranges of the developmentally disordered groups) to tell the story from a wordless picture book. Following their spontaneous narratives, a set of probe questions was asked about the story characters' feeling states. The autistic and mentally retarded subjects were also given a standard test of false belief. The main findings were that, when closely matched on language ability, no significant group differences were found on measures of narrative length, use of lexical cohesion devices, and mental state terms. On the probed questions, the autistic and mentally retarded subjects gave fewer appropriate emotion responses than the normal subjects, and the autistic subjects had difficulty explaining the emotional states correctly. For the autistic sample, the narrative measures were significantly correlated with performance on the theory of mind task. The findings are interpreted in terms of the contributions of both linguistic and social–cognitive factors in narrative ability.