Discourse analysis is gaining its prominence in teaching reading. The paper presents an example of analyzing the system of reference and lexical cohesion of a news report. It demonstrates how to involve discourse analysis into the teaching of newspaper reading in order to make students get a clear framework of reference and lexical cohesion in a functional-grammar-conscious manner. Discourse analysis is gaining its prominence in teaching reading. The paper presents an example of analyzing the system of reference and lexical cohesion of a news report. It demonstrates how to involve discourse analysis into the teaching of newspaper reading in order to make students get a clear framework of reference and lexical cohesion in a functional-grammar-conscious manner.