This paper describes a proposal and some preliminary evidence in support of a model for understanding the points of simple stories. The proposed model differs from existing systems in that it includes, in addition to a representation of the plans and goals of each of the story characters, a model of the beliefs and intentions of the author and the reader. It is hypothesized that readers use story-specific information in conjunction with their own beliefs about the story events in order to make inferences relevant to the point of the story that the author intended. Evidence from adult readers is presented in support of each of the components of the model and their interaction. The proposed model has relevance for psychological and computational research on story understanding. The work also has implications for more general discourse situations in which understanding is predicated on the knowledge of shared beliefs.