Cortical activity associated with generating an inference was measured using fMRI. Participants read three-sentence passages that differed in whether or not an inference needed to be drawn to understand them. The inference was based on either a protagonist's intention or a physical consequence of a character's action. Activation was expected in Theory of Mind brain regions for the passages based on protagonists' intentions but not for the physical consequence passages. The activation measured in the right temporo-parietal junction was greater in the intentional passages than in the consequence passages, consistent with predictions from a Theory of Mind perspective. In contrast, there was increased occipital activation in the physical inference passages. For both types of passage, the cortical activity related to the reading of the critical inference sentence demonstrated a recruitment of a common inference cortical network. This general inference-related activation appeared bilaterally in the language processing areas (the inferior frontal gyrus, the temporal gyrus, and the angular gyrus), as well as in the medial to superior frontal gyrus, which has been found to be active in Theory of Mind tasks. These findings are consistent with the hypothesis that component areas of the discourse processing network are recruited as needed based on the nature of the inference. A Protagonist monitoring and synthesis network is proposed as a more accurate account for Theory of Mind activation during narrative comprehension. Hum Brain Mapp, 2011. © 2010 Wiley-Liss, Inc.