Inference generation, an emerging skill in preschool-aged children, is critical for story comprehension and often requires instruction and practice to develop. Drama-based instruction (DBI) is a promising strategy for supporting preschool students’ inferencing skills, emotion understanding, and overall story comprehension. The current study examined the effects of a DBI story time intervention on preschool students’ recall of story character feeling states. As part of the larger intervention, 196 students (ages 3-5) were randomly assigned by classroom to participate in DBI or traditional story time. After story time, students completed a brief story retelling task (free and prompted recall of the story). Recordings of students’ story retellings were coded for embodied behavior (i.e., gesture, facial expression, vocal change, and body movement) specific to character feelings. Embodied behaviors supported student recall of story character feelings and emotion words. DBI intervention students used more embodiment, specifically gesture, when recalling story character feelings compared to their control group peers. Finally, hearing a DBI story supported students’ emotion word recall, particularly for 3- and 4-year-old students. The findings from this study offer evidence for incorporating drama-based teaching strategies into story time to promote students’ inferencing skills regarding story character internal states and subsequent story comprehension.