Participants were given counterfactual sentences--for example, "If Mary had won the lottery she would have bought a Mercedes car"--or factual sentences--for example, "Because Mary won the lottery, she bought a Mercedes car"--embedded in short narratives. Reading times showed that readers were immediately sensitive to the special status of counterfactual information (Experiment 1). In addition, probe-recognition latencies demonstrated that old information was more accessible in counterfactual than in factual stories, and new information was equally accessible in both kinds of stories (Experiment 2). However, after reading additional clauses, new information became less accessible in counterfactual than in factual stories (Experiment 3). These results suggest that counterfactual events are momentarily represented but are later suppressed and the readers' attention goes back to previous events in the story.