This paper discusses our ongoing work on constructing an annotated corpus of children's stories for further studies on the linguistic, computational, and cognitive aspects of story structure and understanding. Given its semantic nature and the need for extensive common sense and world knowledge, story understanding has been a notoriously difficult topic in natural language processing. In particular, the notion of story structure for maintaining coherence has received much attention, while its strong version in the form of story grammar has triggered much debate. The relation between discourse coherence and the interestingness, or the point, of a story has not been satisfactorily settled. Introspective analysis on story comprehension has led to some important observations, based on which we propose a preliminary annotation scheme covering the structural, functional, and emotional aspects connecting discourse segments in stories. The annotation process will shed light on how story ...