Readers mentally simulate the objects and events described in narratives. One common assumption is that readers mentally embody an actor's perspective; alternatively, readers might mentally simulate events from an external "onlooker" perspective. Two experiments examined the role of pronouns in modulating a reader's adopted perspective when comprehending simple event sentences. Experiment 1 demonstrated that readers embody an actor's perspective when the pronoun you or I is used, but take an external perspective when he is used. Experiment 2, however, found that a short discourse context preceding the event sentence led readers to adopt an external perspective with the pronoun I. These experiments demonstrate that pronoun variation and discourse context mediate the degree of embodiment experienced during narrative comprehension: In all cases, readers mentally simulate objects and events, but they embody an actor's perspective only when directly addressed as the subject of a sentence.