This study compared the narrative abilities of mildly mentally retarded and nonretarded children. Twenty mildly mentally retarded children and 20 nonretarded children, matched on mental age, PPVT-R scores, and SES were audiotaped while narrating a wordless picture book story. Results showed no differences between the groups in narrative length, use of tense and conjunctions, and use of narrative devices. However, there were significant differences in use of reference, with the mildly retarded children using more definite article + noun character introductions, showing more pronoun confusion, and more often pronominalizing all references to the story protagonist. Control of reference in narrative is discussed as presenting a particularly challenging set of discourse abilities because it requires the child to integrate knowledge across a number of linguistic and nonlinguistic domains.