This paper investigates the theory of imagination in Paul Ricoeur; by using the hermeneutical orientation as guideline, it will. clarify the extension of hermeneutical circle. This extension allow Ricoeur to have dialogue with different theories in human sciences. For him, the imagination plays a key role in animating symbol, metaphor, and narrative to constitute the hermeneutical moments. The semantic transference imported by metaphor is itself an application of metaphor of movement and of direction. While Ricoeur examines the theories of metaphor, he focuses on the semantic innovation, in which the imagination operates the synthesis of identity and difference. Metaphor itself is engaged in the dialectics of sense and reference, in this regard, Ricoeur intensifies an ontological reading; for him, the semantic innovation has still its connection with the world instead of cutting from it. Based on the theory of imagination, Ricoeur explains how the schematism of productive imagination goes through his hermeneutics by integrating the three aspects: metaphor, narrative, and action. The imagination is combined with the transference of meaning and distends the hermeneutical space. It shows the dynamics of the interpretative engagement in the world by way of the dialectical model of conflicts and oppositions. Due to the function of imagination, there could be a continuous cyclic alteration of interpreter, text, and the other.