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This article reports findings from a qualitative study of a 10-week interactive drama residency in a large Headstart preschool in a southeastern state. The goal of the study was to learn about what happened when three to five-year old children and their teachers experienced interactive drama, with particular questions about how the young children’s academic and social development might be supported with dramatic arts. Findings from a qualitative analysis of observations, interviews and children's drawings indicated how important movement was for engaging young children, how rituals supported self-efficacy and risktaking, and how traveling in and out of a story world supported the imagination necessary for early literacy development.  Findings also suggested the importance of involving classroom teachers in professional development about dramatic arts.  These findings provoked new questions and plans for future research.