A story generation system based on dynamics of the mind is presented. Semantic theories until now avoided discussing a linkage of language with encyclopedic human knowledge. This paper attacks the problem of how to make clear the complicated, wide‐ranging dynamics of the mind and how to connect it to language.First, the background of this study is shown, in which our model of the mind, with both five levels along the concept formation process and eight domains according to the contents of mental activities, is surveyed.Based on this model, then, the dynamics of mind are discussed, along an Aesop fable. A unit of data processing in the mind is called a “module,” and the mental dynamics are considered as a chain activation of those modules, represented by a dynamic network. Next, a method for story generation is discussed. Propositional information of a sentence is embedded in a slot of activated, frame‐structured modules, and the discourse structure of a generated story basically depends on the dynamic network. Both the chain activation and the generation processes are verified by experiments.Lastly, residual problems of our research, a comparison with related research, and its applications are discussed.This case study would be expected to give a basis to integrated systems for problem solving, natural language and image understandings, their generations, and intelligent