This study examined the effect of joint book reading on children’s narration about the mental states of story characters. Thirty young children were asked to tell the story of a wordless picture book Frog, where are you before (pretest) and after (posttest) they read this book with their parents. A five-level scoring system was used to code children’s and parental explanation of the causal link between the mental state of the story characters and the story events. Parental book reading styles and questionnaires about joint book reading practices at home were also examined. Three main findings were observed: (1) Children who performed better in the posttest were those whose parents received higher scores in level of misrepresentation narratives in joint book reading. (2) Children whose parents scored higher in misrepresentation level and had more discussion with their children during joint book reading showed better skill in mental state narration, but the children whose parents were more dominant and scored lower in misrepresentation level exhibited more difficulty in narrating mental states of characters. (3) The initial age of children being read to was significantly associated with the level of children’s misrepresentation narratives. Educational implication of this study and suggestions for future research are discussed.