Social functioning depends on the ability to attribute and reason about the mental states of others--an ability known as theory of mind (ToM). Research in this field is limited by the use of tasks in which ceiling effects are ubiquitous, rendering them insensitive to individual differences in ToM ability and instances of subtle ToM impairment. Here, we present data from a new ToM task--the Short Story Task (SST)--intended to improve upon many aspects of existing ToM measures. More specifically, the SST was designed to: (a) assess the full range of individual differences in ToM ability without suffering from ceiling effects; (b) incorporate a range of mental states of differing complexity, including epistemic states, affective states, and intentions to be inferred from a first- and second-order level; (c) use ToM stimuli representative of real-world social interactions; (d) require participants to utilize social context when making mental state inferences; (e) exhibit adequate psychometric properties; and (f) be quick and easy to administer and score. In the task, participants read a short story and were asked questions that assessed explicit mental state reasoning, spontaneous mental state inference, and comprehension of the non-mental aspects of the story. Responses were scored according to a rubric that assigned greater points for accurate mental state attributions that included multiple characters' mental states. Results demonstrate that the SST is sensitive to variation in ToM ability, can be accurately scored by multiple raters, and exhibits concurrent validity with other social cognitive tasks. The results support the effectiveness of this new measure of ToM in the study of social cognition. The findings are also consistent with studies demonstrating significant relationships among narrative transportation, ToM, and the reading of fiction. Together, the data indicate that reading fiction may be an avenue for improving ToM ability.