Although children with developmental language disorder demonstrate poor inferential comprehension, few studies have evaluated the effect of interventions to improve inferencing. This study aimed to investigate the efficacy of a small-group intervention designed to improve oral inferential comprehension of narrative discourse. Thirty-seven 5- to 6-year-old children with developmental language disorder participated. The participants were randomly allocated to the oral inferential comprehension (IC) intervention or a control phonological awareness (PA) intervention. Small-group sessions took place twice a week over 8 weeks. Participants were assessed on narrative comprehension and phonological awareness skills pre- and post-intervention, and after a maintenance period of 8 weeks. Compared to the control PA group, the participants in the IC group demonstrated a significant increase in inferential comprehension scores from pre- to post-intervention, which was maintained over time. In addition, the IC group scored significantly higher than the PA group for inferential comprehension on a post-intervention generalization measure. There was no significant difference between the two groups for literal comprehension scores at any assessment point. The results demonstrate that the small-group intervention was effective at improving inferential comprehension of narratives in 5- to 6-year-old children with developmental language disorder. Additionally, generalized improvement was shown across the narrative context, and improvements were maintained two months following the intervention.