The structure of a short story or novel follows a pattern with a beginning, middle, and end. Each of the three parts of the story fulfills a distinct purpose.
Here the author hooks the reader by introducing the main characters and their goals, the setting, and the main conflict. The mood and tone are set at the beginning, and should be consistent throughout the story. The tension will fluctuate, but overall the tone should be suspenseful, romantic, or whatever, from start to finish.
Here a series of events or complications occur, leading to an increase in the tension. This is also where the characters change and grow as they deal with the conflicts they face. Some of the minor crises are temporarily resolved, but the story continues in the direction of a major crisis, or climax.
Here the main conflict is resolved, and the loose ends are tied up. Tension falls quickly, and a good ending leaves the readers satisfied—even if they aren’t happy with the way things turned out.
This pattern is called the story arc; it can be visualized as an inverted check mark, with tension building to the climax, then abruptly declining. Depending on the type of story, the rise may be gradual or sharp, but the ending almost always comes shortly after the main climax. After all, the desire to see how the story ends is what keeps a reader turning the pages. Once they know how it works out, there is not much to hold their interest.
Here are a couple of sites that go into more detail on how to structure a story:
Edit February 17, 2010: I ran across a great post by Justine Lee Musk on writing opening hooks. It’s informative and very entertaining.
Do you prefer stories that keep you on the edge of your seat right from the start, or ones that gradually increase the tension and conflict?