In the chapter A New Kind of Film Adaptation, Chatman counters the critique often aimed at film adaptations based on literature: that film adaptations take away from the audience's use of imagination by displaying everything on screen. Noted scholar Wolfgang Iser is quoted by Chatman saying that, "The point here is that the reader is able to visualize the hero virtually for himself. The moment these possibilities are narrowed down to one complete and immutable picture, the imagination is put out of action." Chatman argues that the imagination is not excluded by the visual medium of film and much can be left for the audience to imagine. In particular, dialogue and narration do not always present what the characters are thinking or feeling in film. For example, body language and expression often go unexplained by direct conversation or even diegetic context in the film.

Chatman mentions Rashomon as an excellent adaptation that invokes the audience's imagination. Although Kurosawa directly translates the dialogue and storyline from which the film is based onto the screen, the film still leaves it to the audience's imagination to try and resolve incongruities and figure out what actually happened. Each of the stories in Rashomon represents what the characters think and believe, however, imagination is not limited by this straightforward presentation of the characters' perspective. In fact, it turns out that these presentations are not straightforward after all. Although everything is presented to the audience visually, there is room to play with and entice the imagination of the audience.

In many ways, the term he uses, imagination, may be inadequate. What he is referring to is the workings of the human mind in its entirety. Rashomon inspires thoughts that do not fall under the scope of imagination, namely critical-thinking, rationalism and emotion. These thought processes make the audience active participants in the film.