How children understand the psychology of a story (i.e., the intentions and experiences of its characters) is pivotal to comprehending its point. In this study we investigate empirically how 5-year-old children in a Japanese kindergarten manage mental state verbs and adjectives when collaboratively retelling a tale heard. The tale, an example of a "kitsune" trickster story about anthropomorphized foxes interacting with humans, contains a number of critical events concerning expected and actual discrepancy between intentions/expectations and outcomes of actions. The empirical data consist of collaboratively retold stories. These have been recorded and transcribed. Theoretically, the study is informed by a sociocultural perspective, emphasizing the appropriation of the intramental function of cultural tools (importantly, in this case, of mental state discourse) through intermental communication, such as joint storytelling. The findings show how the children make use of mental state verbs and adjectives denoting psychological (intellectual and emotional) processes when retelling the story as well as afterwards for rendering their impressions of the story.