Interactive narratives that use tangible and bodily interactions can facilitate multi-sensory, performative, emotional, and lived experiences. Tangible and bodily interactions can be leveraged through diegetic elements as they exist both in the reader’s reality and the fictional world, providing readers a way to enter the story world. To unlock the potential of diegesis as a design concept in interactive narratives further, I give design guidelines focusing on three less investigated areas. I explore how diegetic elements can help readers take internal (positioned inside the story world) and ontological (actions impact story world) roles, provide support for character engagement, and help readers navigate possible complexities of novel interactive narrative systems.I explore these topics through the design and user analysis of three of my storytelling systems – Shiva’s Rangoli, the Next Fairy Tale, and Gummy’s Way Out. Shiva’s Rangoli is a tangible interactive narrative where the reader takes the protagonist’s role and impacts his affective state through a diegetic interface and diegetic ambient effects. The Next Fairy Tale is a VR experience where the reader takes a character’s role by performing diegetic actions like casting spells as they converse with and understand the antagonist’s point of view. Gummy’s Way Out (GWO) is a food-based interactive narrative where the reader eats a gummy bear and then helps him find his way out of their body by consuming various diegetic food items and performing different bodily actions. I provide design guidelines for creating diegetic elements that use tangible and bodily interactions. I describe how affordances and attributes can leverage the sensory, affective, and semantic aspects of actions with diegetic objects and the body, to provide logically convincing narrative consequences to actions, and help readers feel the impact of their actions sensorily and emotionally while taking internal-ontological roles. I describe how character engagement can be built by endowing readers with responsibility, aligning their goals and interests with the character’s, sharing and negotiating diegetic elements with the character, and applying affordances to help readers wear a mask and take a role. Lastly, I identify and recommend how to help readers navigate complexities of the system like - understanding who their character is, how to perform the role and take desired actions, and what consequences their actions may cause. This dissertation provides insight into how diegetic elements can help readers step into, enact, impact, and experience the narrative world in a sensory, emotional, and lived way.