The final paper talks about the story as an incentive for play and creativity in kindergarten. The introductory chapters discuss the role of the story in lives of early and preschool children and the types of stories that have a positive effect on child. Also, it explains the importance of right selection and story application as an opportunity for achieving personal, emotional, social and educational well-being of children, and its impact on child`s overall development. The story is a fundamental part of the educational process in kindergarten. The story stimulates the development of various abilities, ignites the child`s imagination, which is why it is necessary for creative games and activities. Play is explained as fundamental activity of child`s growing up through which the child satisfies his needs, enriches experiences, learns, explores the world around him, socializes and develops psychophysical personality traits. Creativity is the ability or potential of child to process and express their ideas, ways of understanding and experiences. The story can be an incentive for play and creativity because children can express the experience of story in different ways that are mentioned in the paper. The kindergarten teacher`s way of interpreting, reading or telling a story significantly effects the extent to which the story will be acceptable and interesting to child. The storytelling environment should be child-centered, and child should feel comfortable in it. The paper emphasizes the importance of choosing a story where the kindergarten teacher should consider interests of children and their developmental and individual needs in order to encourage their holistic development, learning and upbringing in educational institution.