Abstract Storytelling is a human universal. The ubiquity of stories and the rapid development in Artificial Intelligence (AI) pose important questions: can AI like ChatGPT tell engaging and persuasive stories? If so, what makes a narrative engaging and persuasive? Three pre-registered experiments comparing human-generated narratives from existing research and the ChatGPT-generated versions using descriptions and materials from these studies show that labeling AI as a narrative source led to lower transportation, higher counterarguing, and lower story-consistent beliefs. However, AI-generated narratives led to lower (Study 1 and 3) or similar levels (Study 2) of counterarguing than the human-generated version. Readers showed lower (Study 2) or similar levels of transportation (Study 1 and 3) when reading the AI- than the human-generated stories. We suggest the AI model’s linguistic competence and logical coherence contribute to its stories’ verisimilitude. However, AI’s lack of lived experience and creativity may limit its storytelling ability.