Genre fiction is a term for fictional works (novels, short stories) written with the intent of fitting into a specific literary genre in order to appeal to readers and fans already familiar with that genre. In contemporary fiction publishing, genre is an elastic term used to group works sharing similarities of character, theme, and setting—such as mystery, romance, or horror—that have been proven to appeal to particular groups of readers. Genres continuously evolve, divide, and combine as readers' tastes change and writers search for fresh ways to tell stories. Classic romance novels, such as those written by Jane Austen in the nineteenth century, continue to enjoy popularity today in the form of both books and movies. Despite its popularity, genre fiction is often overlooked by institutions - the reviewing pages of the mainstream newspapers, for example - that favor literary fiction. The reviewing venues for genre fiction are primarily niche media: prozines (professional or industry fanzines), fanzines, and so on.

All fiction is essentially generic. But genre fiction is overtly and intentionally so, signalling its generic identity in the clearest possible terms. A horror novel, for example, makes it clear through its cover design, its blurb, the comments printed on the cover from other novelists, and so on, that it is a horror novel; and it will be shelved in the appropriate place in bookstores.

Genre fiction is often used interchangeably with the term popular fiction, and generally distinguished from literary fiction. A comprehensive discussion of these issues is found in Ken Gelder, Popular Fiction: The Logics and Practices of a Literary Field (2004). An excellent earlier discussion is John Sutherland, Bestsellers: Popular Fiction of the 1970s (1981).
By definition, works of a given genre follow, more or less, the conventions of that genre. The American screenwriting teacher Robert McKee defines genre conventions as the "specific settings, roles, events, and values that define individual genres and their subgenres." These conventions, always fluid, are usually implicit, but sometimes are made into explicit requirements by publishers of fiction as a guide to authors seeking publication.

Screen writers have to ensure that their stories conformed to the guidelines—the closer the conformity, the greater their likelihood of being published. The publisher, for its part, is trying to meet the desires of its readers, who often have strong and specific expectations of the publisher's stories. Such "made-to-measure" writing is genre fiction in its purest form.

Most fiction writing, especially of novel length, does not conform so tightly to the conventions of a genre. Indeed, there is no consensus as to exactly what the conventions of any genre are, or even what the genres themselves are. Writers, publishers, marketers, booksellers, libraries, academics, critics, and even readers all may have different ways of classifying fiction, and any of these classifications might be termed a genre. (For example, one arguable genre of genre fiction—the airport novel—takes its name not from the subjects of its stories, but from the market where it is sold.) It is beyond doubt that readers have preferences for certain types of stories, and that there are writers and publishers who try to cater to those preferences, but the term genre remains amorphous, and the assigning of works to genres is to some extent arbitrary and subjective.
In the publishing industry the term "category fiction" is often used as a synonym for genre fiction, with the categories serving as the familiar shelf headings within the fiction section of a bookstore, such as Western or mystery.

The uncategorized section is known in the industry as "general fiction", but in fact many of the titles in this usually large section are often themselves genre novels that have been placed in the general section because booksellers believe they will appeal, due to their high quality or other special characteristics, to a wider audience than merely the readers of that genre. For example, the novels of Sue Grafton, featuring the private investigator Kinsey Millhone, are mystery novels that are often stocked in the "general fiction" section of bookstores.
The term "genre fiction" is sometimes used as a pejorative antonym of literary fiction, which is presumed to have greater artistic merit and higher cultural value. In this view, by comparison with literary fiction, genre fiction is thought to be formulaic, commercial, sensational, melodramatic, and sentimental. By extension, the readers of genre fiction—the mass audience—are supposed to have less educated taste in literature than readers of literary fiction. Genre fiction is then, essentially, thought to be the literature that appeals to the mass market.

But from another point of view, literary fiction itself is simply another category or genre. That is, it can be thought of as having conventions of its own, such as use of an elevated, poetic, or idiosyncratic prose style; or defying readers' plot expectations; or making use of particular theoretical or philosophical ideas as well as having a niche audience, "generic" packaging and "superstar" authors. The publishing industry itself treats literary fiction as one category among others.

In addition, it can be argued that all novels, no matter how "literary", also fall within the bounds of one or more genres. Thus Jane Austen's Pride and Prejudice is a romance; Fyodor Dostoevsky's Crime and Punishment is a psychological thriller; and James Joyce's A Portrait of the Artist as a Young Man is a coming-of-age story. These novels would usually be stocked in the general or possibly the classics section of a bookstore. Indeed, many works now regarded as literary classics were originally written as genre novels.
Since the beginning of literature it has been acknowledged that there are different types or categories of created work. Poetry, a form of literature older than prose, was in ancient times divided into narrative, dramatic, and lyric forms. Narrative poetry, at least as it was first written (as opposed to recited or sung), was primarily epic. Dramatic poetry came to be divided into tragedy and comedy. The Greek philosopher Aristotle in his Poetics for the first time named story genres by categorizing dramas according to the value-charge of their endings and the design of their stories.

Many fiction genres can be traced to a small number of important or extremely popular literary works written before that genre came into existence. "Genre" fiction is portrayed as those works that seek, in some degree, just to emulate these paradigms. Science fiction began with Jules Verne and then H. G. Wells, as a recognizable genre (although Mary Shelley is generally credited with having written the first science fiction novel, Frankenstein). Horror stories and mystery stories can both be traced in large measure to Edgar Allan Poe and a few others. It is possible also that Poe helped originate science fiction with such stories as 'The Unparalleled Adventure of One Hans Pfall.'

The period 1900–1910 was fertile for the development, by writers such as M. P. Shiel, of fiction genres and character types. Often these appeared in periodicals, which eventually became the pulp magazines of the early 20th century.