Purpose: This study compares the development of essential elements of narrative skill in children from African American English (AAE)- and general American English (GAE)-speaking communities using an innovative elicitation and evaluation paradigm. The measures include: 1) reference contrasting, 2) temporal expressions, 3) mental state descriptions, and 4) understanding of behavior based on false belief. Method: Participants were 291 AAE speakers and 238 GAE speakers, 4 to 9 years of age. Approximately one-third of both dialect groups were identified as language impaired. Children generated two stories based on short picture sequences. Their stories were coded for the four key indices of narrative language. Analysis of Variance was performed with subsets of the measures and a composite index with all measures combined as outcomes; and with age, dialect group, and clinical status as predictors. Results: Age and clinical status had statistically significant effects on the subset measures and the composite score. Variation between AAE and GAE dialect was not a significant factor. Conclusion: By focusing on dialect-neutral elements of narrative—creating links across sentences and providing mental state interpretations--this study adds to our knowledge of development and impairment in narrative production among both AAE- and GAE-background children.