The inferential operations of mildly retarded students reading at the intermediate level were investigated using methods based on discourse comprehension theory. It was hypothesized that problems encountered in reading by these students were related to difficulties in generating logical inferences. Mildly retarded junior high school students and average third grade students of the same reading comprehension level read and recalled one descriptive expository and one narrative passage. On the expository passage, mildly retarded students generated the same quantity of inferences as average third grade students, but the inferences were of inferior quality. On the narrative passage the differences between the two groups were not significant. Differences in inferences generated by mildly retarded students may have been prompted by problems with schema mobilization, maintenance, and refinement in the context of dealing with descriptive expository text. (Author/MM)