Pronoun resolution has long been central to psycholinguistics, but research has mostly focused on personal pronouns (“he”/“she”). However, much of linguistic reference is to events and objects, in English often using demonstrative pronouns, like “that”, and the non-personal pronoun “it”, respectively. Very little is known about potential form-specific preferences of non-personal and demonstrative pronouns and the cognitive mechanisms involved in reference using demonstratives. We present a novel analysis arguing that the bare demonstrative “that” serves a different function by bundling, and making linguistically accessible, complex conceptual structures, while the non-personal pronoun “it” has a form-specific preference to refer to noun phrases mentioned in the previous discourse. In two English self-paced reading studies, each replicated once with slight variations, we show that readers are reading the demonstrative slower throughout, independently of frequency or complexity of the referent, as a reflection of differences in processing demonstratives vs. pronouns. These findings contribute to two distinct but connected research areas: First, they are compatible with an emergent experimental literature showing that pronominal reference to events is preferably done with demonstratives. Second, our model of demonstratives as conceptual bundlers provides a unified framework for future research on demonstratives as operators on the interface between language and broader cognition.