One of the most important features of narrative according to most of the narratologists is its “fabricatedness” or the state of being prefabricated. This feature makes narrative synonymous with lies. It is ironically this very feature that makes a new path to truth as Picasso proclaims “We all know that Art is not truth. Art is a lie that makes us realize truth at least the truth that is given to us to understand. The artist must know the manner whereby to convince others of the truthfulness of his lies.” In this paper we endeavor to read Roberto Benigni’s story in his famous 1997 Life Is Beautiful based on this quality of narrative and discuss the social and cultural effects of telling lies in the form of storytelling and game playing in the growth of children. Benigni is focusing on this feature in the movie and shows the life of a child coming to know one of the most terrible events in the history through storytelling or lies. We discuss the therapeutic, pedagogic and cultural effects of creating alternative worlds for children through the art of storytelling.