Narrative psychology is regarded as a universal human mental activity and is the psychological basis of audiences, thus should not be ignored in the process of museum exhibition interpretation. Narrative psychology is the bridge of effective communication between audiences and exhibitions. This new branch of psychology originated from belletristic narratology. The Lower East Side Tenement Museum in the US, has applied narrative thinking, paying close attention to narrative subject and using narrative strategy to create a unique context of exhibition interpretation, ensuring scientific and accurate narrative, while boosting the dramatization and attractiveness of the narrative. The author reflects on the use of narrative psychology to solve the difficulties of museum exhibition interpretation in China. From this, the heavy responsibilities of narrative exhibitions are addressed and the new and implicit value of narrative psychology in museum exhibition interpretation is discussed.