The work presented here is an empirical study of how advanced learners of English as a foreign language in Argentina access and understand the culture-specific dimensions of literary narrative texts. It has three purposes. First, to extend research into reading in a foreign language to take account of the culture-specific content of texts. Second, to extend the focus of research on intercultural communication to include the analysis of reading processes. Finally, to introduce an approach to the analysis of the cultural dimension of the reading process using a new model of levels of cultural understanding. It is argued that cultural understanding goes beyond the quantification of prior knowledge or background knowledge in the form of idea units as evidence of the comprehension process. In this sense, the proposed model succeeds in portraying a more detailed picture of cultural understanding in this setting.