In this important contribution to narrative theory, Marie-Laure Ryan applies insights from artificial intelligence and the theory of possible worlds to the study of narrative and fiction. For Ryan, the theory of possible worlds provides a more nuanced way of discussing the commonplace notion of a fictional "world," while artificial intelligence contributes to narratology and the theory of fiction directly via its researches into the congnitive processes of texts and automatic story generation. Although Ryan applies exotic theories to the study of narrative and to fiction, her book maintains a solid basis in literary theory and makes the formal models developed by AI researchers accessible to the student of literature. By combining the philosophical background of possible world theory with models inspired by AI, the book fulfills a pressing need in narratology for new paradigms and an interdisciplinary perspective.