abstractPrevious research suggests that situation model construction may be influenced by a reader’s ability to embody the first-person perspective of the protagonist, including character emotions, during online comprehension. This study examined the effect of narrative point-of-view and readers’ own prior personal experience on reading engagement and comprehension. Participants read eighty short story passages on a computer screen, each describing either a familiar or an unfamiliar event. Stories were written in the first or third person, and either featured or did not feature a shift in protagonist emotions in the last sentence of the text. The results indicated that the use of third-person narrative point-of-view had an overall effect on reading engagement and enhanced readers’ ability to monitor changing character emotions. First-person narrative point-of-view, however, promoted protagonist empathy when participants read about unfamiliar events. The results also provide support for the conclusion that readers were more engaged with the story and constructed more effective situation models when they had prior personal experience of story events.