The integration of traditional narratological theories with artificial intelligence (AI) methodologies has catalyzed a transformative shift in automated storytelling, creating immersive, character-driven narratives that adhere to established narrative structures. This paper introduces a novel framework synthesizing AI technique such as natural language generation, character modeling, and plot coherence optimization with foundational narrative principles like Propp's morphology and Freytag's pyramid. Key findings demonstrate how this approach enhances narrative coherence, fosters emotional engagement, and enables user-driven customization across diverse applications, from interactive gaming to personalized education and cultural preservation.