The book, like Rumble Fish, takes place in Tulsa, Oklahoma, Hinton's hometown and the setting of her first book, The Outsiders. However, unlike Rumble Fish, Ponyboy Curtis, the main character in The Outsiders, appears in That Was Then, This Is Now and even takes part in the events surrounding the dance.
The characters of Tim and Curly Shepard from The Outsiders also appear, as does their sister Angela, who is original to That Was Then, This Is Now. Randy, who was in The Outsiders, also appears as a Hippie in this book, which is appropriate to those who have read or seen The Outsiders, as Randy is an affluent kid who feels guilty about the class division and becomes repulsed by it. In Tex, Mark and Cathy appear, who are original to That Was Then, This Is Now. Smokey, who is original to Rumble Fish, is mentioned by Mark.
Mark later appears as a hitchhiker, who has recently escaped from prison and killed multiple people. He forces Tex and Mason to drive him to the state line, holding them at gunpoint; he is killed soon after by the police.
Cathy appears as Tex's English teacher at school, Ms.Carlson. When Mark dies, she goes to his funeral, which makes Tex wonder why. When he asks her, Cathy says that they weren't exactly friends, but she knew him for a long time and they shared a past.
