Research on organisational storytelling has shed light on different types of narratives. A specific story type, organisational myths, has caught the interest of some scholars in the field, but has not been theorised in any great detail. While it is rarely disputed that organisational members can and do develop emotional connections to myths and mythical stories in their social context, how and why these myths, or ‘sacred stories’, emerge in organisational settings has remained mostly unaddressed. Therefore, drawing upon a Jungian psychosocial approach, we propose a process model for the emergence of mythologised stories in organisations by situating members’ psychological dynamics within the social context in which they emerge. We propose that a conscious understanding of the conditions that lead to the emergence of mythologised stories in organisations can help clarify and deepen the relationship between different types of stories to support and sustain organisational change and development. The paper contributes to the existing literature on organisational storytelling and myths within organisational studies.