A well-developed vocabulary is a key indicator of language proficiency and success in the academic world (Henriksen, 2006; Schmitt, 2010). Oral narratives, both spontaneous and elicited, have been used extensively to measure (i) lexical diversity and density, and (ii) the use of Internal State Terms (ISTs) which is grounded in the Theory of Mind framework. Spoken and written data elicited from second language learners has consistently revealed that limited breadth and depth of vocabulary knowledge leads to the production of utterances that fail to convey a variety of emotional loads, or express shades of intensity (Das, 2018; Nassaji, 2006). The study discussed in this chapter examines the lexical diversity in the production of Internal State Terms in the narratives of 30 Hindi-English bilinguals aged 8 to 9 years. Oral narratives were elicited using Multilingual Assessment Instrument for Narratives (MAIN) (Gagarina, et al., 2012) and were analysed for the use of ISTs belonging to one of six categories—perceptual, physiological, consciousness, emotion, mental verbs and linguistic verbs. An analysis of the data shows that the narratives produced by the sample were characterized by a paucity of lexical diversity and richness; more frequent and less emotionally charged words were used. Perceptual terms were produced at a much higher rate than other terms and consciousness terms were not produced at all. This has implications for the teaching of vocabulary. The chapter concludes with tasks that illustrate how lexical semantics and morphology can be leveraged to develop lexical knowledge.