What accounts for the power of stories to both entertain and illuminate? This question has long compelled the attention of storytellers and students of literature alike, and, over the past several decades, it has opened up broader dialogues about the nature of culture and interpretation. This third edition of the bestselling Essentials of the Theory of Fiction provides a comprehensive view of the theory of fiction from the nineteenth century through modernism and post-modernism to the present. It offers a sweeping sample of major theories of fictional technique while emphasising recent developments in literary criticism. Ten new selections address issues such as oral memory in African American fiction, temporality, queer theory, magical realism, interactive narratives and the effect of virtual technologies on literature. For students and generalists alike, Essentials of the Theory of Fiction is an invaluable resource for understanding how fiction works.