Using participatory action research, the first researcher functioned as co-teacher in a fifth-grade class in a large northeastern city public school. The researcher and classroom teacher guided 28 students working in book clubs to compose digital stories in response to historical fiction. The research questions were: (a) What interpretations did students have of their historical fiction novels through the mediational tools of digital storytelling? (b) How did the dynamics of the book club structure contribute to the students’ interpretive work? Data sources included students’ process and product work, video and audio recordings of work sessions, reflective notes and journal, a semi-structured interview with the teacher, and stimulated recall interviews with three case study book clubs. Both researchers used multimodal analysis, particularly the concept transmediation, concepts of interpretation in reader response, and grounded theory, informed by activity theory, to analyze data. Findings show students’ expression of and limits to interpretation in the multimodal ensembles of their digital stories. The purposeful use of digital technology generated ongoing problem solving. Activity systems expanded students’ learning by generating collaborative zones of proximal development, a dialectic among mediational tools, and opportunities to take on roles that shaped students’ identities and repositioned who they could be in this learning community. The study shows the value of project-based multimodal responses using digital technologies in collaborative groups to develop students’ comprehension of literary texts. The study suggests an alternative to writing-to-learn practices that dominate the implementation of the Common Core State Standards, and that high-stakes tests reify.