This article describes the adaptation of 'story grammar' to developing the subject understanding and literacy of 14-16-year-old students. 'Story grammar' analyses the structure of episodes of a typical story and it was developed through research into the narrative development of younger, frequently language-delayed, children. Reasons for expecting this story grammar to provide a helpful basis for teaching older students are summarized. An application of story grammar in teaching business studies is described through the activities designed for students and evidence from students' work. Implications for understanding of literacy in a subject context are discussed.