A theory of how readers monitor concerns of characters and make causal inferences during reading is presented. The focus is on the reader's understanding of what characters do when goals either succeed or fail. Knowledge of goal processes enable coherent understanding to be achieved when characters change goal plans and pursue new courses of action. Four simulations of data from previously published studies on goal-related inferences during reading are reported. Narrative texts and data came from Experiments 1, 2, and 3 of McKoon and Ratcliff (1992) and Experiment 3 of van den Broek and Lorch (1993). In the simulations, use of goal plan knowledge in making causal inferences is illustrated in the discourse analysis of the texts. To simulate online processing, the causal relations between clauses or sentences were processed 1 clause or sentence at a time by a connectionist model. Estimates of accessibility of clauses or sentences in long-term memory by the model successfully predicted differences in response times from the 4 experiments. The successful simulations provide strong evidence that readers monitor and infer goal plans of action and make causal inferences based on them during reading.