The book, like Rumble Fish, takes place in Tulsa, Oklahoma in the same universe as Hinton's first book, The Outsiders. However, unlike Rumble Fish, Ponyboy Curtis, the main character of The Outsiders, appears in That Was Then, This Is Now and even takes part in the events surrounding the dance and killing spree.
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, which is the background and beliefs of many hippies. In Tex, there is a brief description of Mark and Cathy, who are original to That Was Then, This Is Now.