Children with pre- or perinatal brain injury (PL) exhibit marked plasticity for language learning. Previous work has focused mostly on the emergence of earlier-developing skills, such as vocabulary and syntax. Here we ask whether this plasticity for earlier-developing aspects of language extends to more complex, later-developing language functions by examining the narrative production of children with PL. Using an elicitation technique that involves asking children to create stories de novo in response to a story stem, we collected narratives from 11 children with PL and 20 typically developing (TD) children. Narratives were analysed for length, diversity of the vocabulary used, use of complex syntax, complexity of the macro-level narrative structure and use of narrative evaluation. Children’s language performance on vocabulary and syntax tasks outside the narrative context was also measured. Findings show that children with PL produced shorter stories, used less diverse vocabulary, produced structurally less complex stories at the macro-level, and made fewer inferences regarding the cognitive states of the story characters. These differences in the narrative task emerged even though children with PL did not differ from TD children on vocabulary and syntax tasks outside the narrative context. Thus, findings suggest that there may be limitations to the plasticity for language functions displayed by children with PL, and that these limitations may be most apparent in complex, decontextualized language tasks such as narrative production.