In recent years, memory-based and explanation-based theories have dominated the discourse processing literature. Numerous studies have been conducted to show support for each of the two views. Most of these studies have manipulated factors in the episodic memory trace of texts, without a great deal of focus on how general world knowledge impacts processing. We describe several studies from the reading comprehension literature that show strong effects of general world knowledge. We also present a framework that can account for both episodic and general world knowledge effects, and that may be used to reconcile the memory-based and explanation-based views.