Much of the debate between theorists of deliberative democracy has centered on forms of discourse and the role that reason should play. But philosophers have been unable to explain the transformative power attributed to deliberation. I argue that we ought to look to recent studies of moral psychology, which illuminate the moralizing mechanisms brought into play by deliberation. In deliberations by small groups empathic cues, as well as direct and semantically mediated associations between the social situations of oneself and others, produce moral cognition, and broaden awareness of morally salient features of the policies and issues under discussion. Narrations in diverse groups can enhance moral perception, cue empathic reactions, and provide powerful tools for organizing moral knowledge, in contrast to more confrontational forms of discourse, such as direct argumentation. The moral psychology at work in diverse and small groups of deliberators suggests that the institutionalization of deliberative forums could produce a more representative government and achieve morally better politics and policies.