diff --git a/.gitignore b/.gitignore
index b22c141..09da353 100644
--- a/.gitignore
+++ b/.gitignore
@@ -24,3 +24,4 @@ data/users.db
 
 # local experimentation
 local/
+.vscode/
diff --git a/data/explainability/explanation_templates.yaml b/data/explainability/explanation_templates.yaml
new file mode 100644
index 0000000..ed60481
--- /dev/null
+++ b/data/explainability/explanation_templates.yaml
@@ -0,0 +1,24 @@
+genres: 
+  - "You [don't ]like {}."
+  - "You [don't ]watch {} movies."
+  - "You [don't ]enjoy {} films."
+
+actors: 
+  - "You [don't ]like movies with {}."
+  - "You [don't ]watch films if {} are in them."
+  - "You [don't ]care for {} in movies."
+
+directors: 
+  - "You [don't ]like {}' movies."
+  - "You [don't ]watch films by {}."
+  - "You [don't ]enjoy movies made by {}."
+
+keywords: 
+  - "You [don't ]like movies about {}."
+  - "You [don't ]watch films with {}."
+  - "You [don't ]care for {} in movies."
+
+year: 
+  - "You [don't ]like movies from {}."
+  - "You [don't ]watch films made in {}."
+  - "You [don't ]enjoy movies from {}."
diff --git a/moviebot/explainability/__init__.py b/moviebot/explainability/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/moviebot/explainability/explainable_user_model.py b/moviebot/explainability/explainable_user_model.py
new file mode 100644
index 0000000..3fee96a
--- /dev/null
+++ b/moviebot/explainability/explainable_user_model.py
@@ -0,0 +1,30 @@
+"""Abstract class for creating explainable user models."""
+
+from abc import ABC, abstractmethod
+from typing import Dict
+
+from dialoguekit.core import AnnotatedUtterance
+
+UserPreferences = Dict[str, Dict[str, float]]
+
+
+class ExplainableUserModel(ABC):
+    @abstractmethod
+    def generate_explanation(
+        self, user_preferences: UserPreferences
+    ) -> AnnotatedUtterance:
+        """Generates an explanation based on the provided input data.
+
+        Args:
+            input_data: The input data for which an explanation is to be
+            generated.
+
+        Returns:
+            A system utterance containing an explanation.
+
+        Raises:
+            NotImplementedError: This method must be implemented by a subclass.
+        """
+        raise NotImplementedError(
+            "This method must be implemented by a subclass."
+        )
diff --git a/moviebot/explainability/explainable_user_model_tag_based.py b/moviebot/explainability/explainable_user_model_tag_based.py
new file mode 100644
index 0000000..5638673
--- /dev/null
+++ b/moviebot/explainability/explainable_user_model_tag_based.py
@@ -0,0 +1,94 @@
+"""Class for creating a tag-based user model explanations.
+
+The class generates explanations for user preferences in the movie domain.
+Currently, the explanations are based on movie tags/attributes that were
+explicitly mentioned by the user in the conversation.
+Future versions of the class will also support implicit tags/attributes, which
+are inferred from the movie recommendation feedback. Explanations are based on
+the templates loaded from a YAML file.
+"""
+
+import os
+import random
+import re
+
+import yaml
+from dialoguekit.core import AnnotatedUtterance
+from dialoguekit.participant import DialogueParticipant
+
+from moviebot.explainability.explainable_user_model import (
+    ExplainableUserModel,
+    UserPreferences,
+)
+
+_DEFAULT_TEMPLATE_FILE = "data/explainability/explanation_templates.yaml"
+
+
+class ExplainableUserModelTagBased(ExplainableUserModel):
+    def __init__(self, template_file: str = _DEFAULT_TEMPLATE_FILE):
+        """Initializes the ExplainableUserModelTagBased class.
+
+        Args:
+            template_file: Path to the YAML file containing explanation
+                templates. Defaults to _DEFAULT_TEMPLATE_FILE.
+
+        Raises:
+            FileNotFoundError: The template file could not be found.
+        """
+        if not os.isfile(template_file):
+            raise FileNotFoundError(
+                f"Could not find template file {template_file}."
+            )
+
+        with open(template_file, "r") as f:
+            self.templates = yaml.safe_load(f)
+
+    def generate_explanation(
+        self, user_preferences: UserPreferences
+    ) -> AnnotatedUtterance:
+        """Generates an explanation based on the provided user preferences.
+
+        Args:
+            user_preferences: User preferences.
+
+        Returns:
+            The generated explanation.
+        """
+        explanation = ""
+        for category, prefs in user_preferences.items():
+            positive_tags = [tag for tag, value in prefs.items() if value == 1]
+            negative_tags = [tag for tag, value in prefs.items() if value == -1]
+
+            for i, tags in enumerate([positive_tags, negative_tags]):
+                if len(tags) == 0:
+                    continue
+
+                concatenated_tags = ", ".join(tags)
+                template = random.choice(self.templates[category]).format(
+                    concatenated_tags
+                )
+
+                explanation += self._clean_negative_keyword(
+                    template, remove=i == 0
+                )
+
+        return AnnotatedUtterance(explanation, DialogueParticipant.AGENT)
+
+    def _clean_negative_keyword(
+        self, template: str, remove: bool = True
+    ) -> str:
+        """Removes or keeps negation in template.
+
+        Args:
+            template: Template containing negative keyword.
+            remove: If True, remove the negative keyword. Defaults to True.
+
+        Returns:
+            Template with negative keyword removed or replaced.
+        """
+        if remove:
+            return re.sub(r"\[.*?\]", "", template)
+
+        chars_to_remove = "[]"
+        trans = str.maketrans("", "", chars_to_remove)
+        return template.translate(trans)
diff --git a/tests/explainability/test_explainable_user_model_tag_based.py b/tests/explainability/test_explainable_user_model_tag_based.py
new file mode 100644
index 0000000..a2a81a1
--- /dev/null
+++ b/tests/explainability/test_explainable_user_model_tag_based.py
@@ -0,0 +1,43 @@
+import pytest
+
+from moviebot.explainability.explainable_user_model_tag_based import (
+    ExplainableUserModelTagBased,
+)
+
+
+@pytest.fixture
+def explainable_model() -> ExplainableUserModelTagBased:
+    return ExplainableUserModelTagBased()
+
+
+def test_generate_explanation_positive(explainable_model):
+    user_prefs = {"genres": {"action": 1, "comedy": 1}}
+    explanation = explainable_model.generate_explanation(user_prefs)
+    assert "action" in explanation.text
+    assert "comedy" in explanation.text
+
+
+def test_generate_explanation_negative(explainable_model):
+    user_prefs = {"actors": {"Tom Hanks": -1, "Adam": -1}}
+    explanation = explainable_model.generate_explanation(user_prefs)
+    assert "Tom Hanks" in explanation.text
+    assert "Adam" in explanation.text
+
+
+def test_generate_explanation_mixed(explainable_model):
+    user_prefs = {"keywords": {"war theme": 1, "comic": -1}}
+    explanation = explainable_model.generate_explanation(user_prefs)
+    assert "war theme" in explanation.text
+    assert "comic" in explanation.text
+
+
+def test_clean_negative_keyword_remove(explainable_model):
+    template = "You [don't ]like action."
+    cleaned = explainable_model._clean_negative_keyword(template)
+    assert cleaned == "You like action."
+
+
+def test_clean_negative_keyword_keep(explainable_model):
+    template = "You [don't ]like action."
+    cleaned = explainable_model._clean_negative_keyword(template, remove=False)
+    assert cleaned == "You don't like action."