Seventy-two African-American and European American low-income preschoolers attending Head Start and community childcare centres were asked to create an oral story using a wordless picture book, then told an oral story using the same book and asked follow-up comprehension questions. Children's performance was better on questions addressing the character's actions versus his motives/intentions. Five-year-olds outperformed three-year-olds, and African-Americans outperformed European Americans on questions about the character's motives/intentions. After controlling for children's age and ethnicity, the only narrative skill that predicted cognitive abilities was narrative quality: children who created narratives that included the character's motives/intentions had higher cognitive skills. (Contains 1 figure, 5 tables, and 1 note.)