Critical thinking has gained paramount importance in education. Thus, educators have long been interested in achieving critical thinking skills as an outcome of the learning process. Literature has been regarded as an effective tool in EFL classes, for it improves EFL learners’ language skills and communicative competencies. It is also supposed that it enhances learners’ critical thinking skills. This study investigates how studying the short story of Rip Van Winkle (1819) by Washington Irving might develop learners’ critical thinking. The purpose of this study is to explore how reading and analyzing the narrative elements and the characters’ evolution within this short story can enhance analytical abilities in a classroom environment that is based on group discussion, through conducting a survey in which 40 learners were asked questions to evaluate their critical thinking proficiency after studying Rip Van Winkle. After collecting and analyzing their responses, the results revealed that studying this short story helped learners develop a number of cognitive skills, such as analyzing, questioning, evaluating different perspectives and interpretations, and judging based on evidence. These skills are evidence of enhanced critical thinking.