The ability to understand causal connections in narrative has been shown to be related to a variety of school-related skills such as reading, comprehension, and memory in adults, school-age children, and children with disabilities. Research also shows that there is a developmental trend in the ability to use and understand causal connections. This article reviews the research to date and discusses how narrative causal understanding may be important for children's school readiness skills. Additionally, the article proposes the use of narrative causal understanding as an intervention for discourse understanding and school readiness skills and describes directions for future research.