The purpose of this study is to clarify and discuss how the space of argument is involved in generation of retelling, and, based on the results, to design a literature reading class where students’ skill of retelling can be nurtured, and to verify the validity of the theory. The results indicated the following. First, 1) a variation of the space of argument, i.e. a) narrator and listener, b) context (age, culture, etc.), or c) a relation with other texts, will change the purpose and intention of each narrator and listener; 2) these changes of purpose and intention generate a cognitive gap between a story to be told which the narrator and listener expect and a story which has already been told, and; 3) according to a newly-expected telling, events will be selected, arranged, and edited to generate a retelling. Second, it was indicated that, provision of the space of argument close to the original text enables a reader, based on events obtaining new meanings, to feel a gap against his/her conventional thought patterns and to retell a picture of the world of characters. In addition, this provision will also have an influence on the retelling of a reader’s personal narrative.