Identify key themes for the particular story, such as forgiveness, obedience, discipline, consequences or friendship. Tell, rather than read the story verbatim with verbal analogies interspersed that illustrate how the situation or the character's emotions are similar to familiar experiences today. Flesh out the characters with real feelings and motivations to which the children can relate. Help them imagine similar events in their own lives to create a bond with the characters as real people, not just storybook characters.
Bring small objects that represent the different characters, ideas and themes in the story. Pass them out to the kids and as you read or tell the story, ask each person to hold up his object when he hears the part that relates to what he is holding. Discuss the significance, symbolism and any historical backdrop relating to this part of the story. Encourage the kids to participate in the storytelling and add their own insights rather than being passive listeners.
Read through an entire book of the Bible chapter by chapter to see how the entire story develops and the influences on the characters from beginning to end, rather than watering down the story's impact by taking it out of context. By seeking the full counsel of the Word of God, day after day, a chapter or two at a time, kids can start to recognize patterns and relationships in stories that help them draw connections to the lesson God intended believers to apply on a daily basis.
Arrange for "you are there" experiences to help kids understand the similarities between themselves and someone who lived thousands of years ago. If your story is about pregnancy and babies, bring in a pregnant woman and a baby to talk about how it feels to be pregnant, what it is like to have a baby around, what babies need and so on. If there are animals in your story, visit a petting zoo or farm. If stars and nighttime comes into the story, go star gazing. Hold a backyard campout to see what it feels like to sleep on the ground or listen to music that helps you imagine choirs of angels.
Reinforce the key points with crafts and games that serve as object lessons, instead of random unrelated activities just to keep the kids busy before and after the story, . Retell the story in song, letting the kids sing and dance along to get them moving. Some kids learn best when their bodies are moving or when the lesson is put to a rhythm so incorporating these elements will act as a mnemonic device for many.
Stage skits and puppet shows to get the kids actively involved in their own learning. Ask your pastor for permission to have the kids perform briefly for the adult service or arrange a performance day with a homeschool group or afterschool youth program. Collect costumes or make puppets and practice your script over a period of three to four weeks. It isn't necessary to have everything just perfect. Let the kids have fun with this and enjoy the performance for friends and family.