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AbstractThis article addresses the questions: (a) What kind of discourse abilities children need in order to produce conversational narratives?; (b) In what order are these abilities acquired?; and (c) How do children acquire these abilities in interaction with adults? The first question is dealt with by means of a descriptive model that represents different knowledge domains working jointly in narrative interaction. The next question is addressed through empirical findings resulting in three dimensions of developmental progress. The answer to the final question deals with the explanatory aspect in terms of possible developmental mechanisms underlying the observed patterns of adult-child interaction. (Linguistics)