People can acquire both true and false knowledge about the world from fictional stories. The present study explored whether the benefits and costs of learning about the world from fictional stories extend beyond memory for directly stated pieces of information. Of interest was whether readers would use correct and incorrect story references to make deductive inferences about related information in the story, and then integrate those inferences into their knowledge bases. Participants read stories containing correct, neutral, and misleading references to facts about the world; each reference could be combined with another reference that occurred in a later sentence to make a deductive inference. Later they answered general knowledge questions that tested for these deductive inferences. The results showed that participants generated and retained the deductive inferences regardless of whether the inferences were consistent or inconsistent with world knowledge, and irrespective of whether the references were placed consecutively in the text or separated by many sentences. Readers learn more than what is directly stated in stories; they use references to the real world to make both correct and incorrect inferences that are integrated into their knowledge bases.