Recent progress in large language models (LLMs) has opened new possibilities for mental health support, yet current approaches lack realism in simulating specialized psychotherapy and fail to capture therapeutic progression over time. Narrative therapy, which helps individuals transform problematic life stories into empowering alternatives, remains underutilized due to limited access and social stigma. We address these limitations through a comprehensive framework with two core components. First, **INT** (Interactive Narrative Therapist) simulates expert narrative therapists by planning therapeutic stages, guiding reflection levels, and generating contextually appropriate responses through retrieval-augmentation. Second, **IMA** (Innovative Moment Assessment) provides a therapy-centric evaluation method that quantifies effectiveness by tracking “Innovative Moments” (IMs), critical narrative shifts in client speech signaling therapy progress. Experimental results on 260 simulated clients and 230 human participants reveal that **INT** consistently outperforms standard methods in therapeutic quality and depth. We further demonstrate the effectiveness of **INT** in synthesizing high-quality support conversations to facilitate social applications.