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As we comprehend narratives, our attentional engagement fluctuates over time. Despite theoretical conceptions of narrative engagement as emotion-laden attention, little empirical work has characterized the cognitive and neural processes that comprise subjective engagement in naturalistic contexts or its consequences for memory. Here, we relate fluctuations in narrative engagement to patterns of brain coactivation and test whether neural signatures of engagement predict subsequent memory. In behavioral studies, participants continuously rated how engaged they were as they watched a television episode or listened to a story. Self-reported engagement was synchronized across individuals and driven by the emotional content of the narratives. In functional MRI datasets collected as different individuals watched the same show or listened to the same story, engagement drove neural synchrony, such that default mode network activity was more synchronized across individuals during more engaging moments of the narratives. Furthermore, models based on time-varying functional brain connectivity predicted evolving states of engagement across participants and independent datasets. The functional connections that predicted engagement overlapped with a validated neuromarker of sustained attention and predicted recall of narrative events. Together, our findings characterize the neural signatures of attentional engagement in naturalistic contexts and elucidate relationships among narrative engagement, sustained attention, and event memory.