In this paper, we discuss two types of discourse: the first one--the discourse of cognitive impairment of a long-term care facility (LTCF) reflected in the institution's language policy and in the language use of several caregivers of the LTCF; and the second one, the discourse of "small" stories (Bamberg and Georgakopoulou 2008) told by Alise, a resident of the LTCF. We investigate how the participant of the study, Alise, an older adult suffering from multiple sclerosis and experiencing memory loss, positioned herself depending on which discourse was being used, and through a series of small stories indexed her re-emerging identity as a capable communicator. By approaching narrative as a type of social practice rather than a text and expanding it with sociocultural views on language, we analyze selected excerpts between the researcher and the participant across 12 data collection sessions in order to demonstrate how the participant's changes in identity (and memory) were reflected in and facilitated by Alise's small stories. In addition, we investigate why the series of small stories told by Alise facilitated her full engagement, in contrast to the discourse of cognitive impairment imposed upon her by the institution. We also demonstrate that Alise's small stories, which were used as a site for identity construction, helped this socially disengaged resident of the LTCF to reposition herself as an active, capable and valid participant in communication, thus positively affecting her sense of self-esteem and well-being. Finally, we emphasize the implications of our research for the professionals, volunteers and family members involved in caring for older people with dementia. Specifically, we emphasize the importance of recognizing a "small story" in particular, and languaging in general, as a mediator of positive change. This recognition, in our view, is essential in making meaningful the lives of people experiencing memory loss and in improving their quality of life.