This article presents the results of two studies examining the effects of different narrative situations on the interpretation of free indirect discourse (FID). Our test items featured either a neutral heterodiegetic narrator, a homodiegetic narrator, or an evaluative heterodiegetic narrator. Participants had to assign a thought expressed via FID to either the narrator or the protagonist featured in example text passage. The results revealed that only homodiegetic narrators influence the interpretation in favor of the narrator. We next tested whether this was due to a special status of the first-person or the narrator’s homodiegetic nature by incorporating a heterodiegetic narrator using first-person pronouns. The results showed no difference in interpretation between homodiegetic and heterodiegetic narrators using first-person pronouns. In third-person narration, the protagonist was chosen significantly more often. Our studies thus demonstrate that first-person narration generally establishes the narrator as a prominent perspective-taker, regardless of their diegetic nature.