If we examine the most ancient works of literature in the world, those found in Mesopotamia and dating from the third millennium B.C.E., we find two impulses which run through all of literature to the present day, though they are present in their purest and most exclusive form before the Common Era: the desire to record and the desire to celebrate.

The first of these may be expressed in something as mundane as a set of accounts or a business contract, which appear to be the use to which the Sumerians first put their cuneiform script, but these are soon followed by hymns (which focus on the desire to celebrate), myths and epic poetry (in which the two impulses are united). The “Kesh Temple Hymn” and the “Instructions of Shuruppak,” both of which seem to have been composed around 2500 B.C.E., are two of the oldest extant pieces of literary writing. The former is obviously a devotional work, the latter a piece of what we have come to call 'wisdom literature', written with the aim of inculcating virtue and piety.

The first work of fiction, and the first major work of world literature, "The Epic of Gilgamesh", is probably not very much later than these, perhaps dating to around 2100 B.C.E., though there are several different versions. "The Epic of Gilgamesh", like the "Iliad" and the "Odyssey", was almost certainly sung to the accompaniment of stringed instruments and combines the purposes of recording tribal history and celebrating great deeds, as noted above.

The origins of literature are one and the same with the very origins of civilization. These origins can be traced all the way back to ancient Mesopotamia along with the wheel and written law. There, around 3000 B.C, we can see a form of writing known as cuneiform come into common practice. This writing was used largely for administrative and instructional writing, though some forms of written song and poetry date back to this time. One of the oldest known examples of written poetry is the "Kesh Temple Hymn," which is a Sumerian hymn dating around 2400 B.C.

In regard to the beginnings of literature as we know it, the oldest known work of fiction is The Epic of Gilgamesh, which first appears around third millennium B.C.

I think from very early on, human beings have been storytellers in one form or another.  They told stories of their lives, they created stories to explain the natural phenomena around them, and they created stories of heroes and heroines.  To be human is to imagine, and to be human is to create a narrative of one's world and one's life. Before they had writing, humans told stories in the form of pictures, for example, in cave paintings, and probably in rhyme, since the rhythm of poetry made it easier to remember a story. Once people acquired writing, they used writing to keep records, certainly, but they also used writing to tell their stories.  The oldest writings in the world that we know of are from the Middle East and go back to approximately 2600 BC.  These include poetry and stories. It is possible that there is earlier written literature, but none has been found so far.  So, the origins of literature are to some degree lost in the mists of time, but we do know that people have been telling stories from their earliest days and will continue to do so as long as humans exist as a species. 

How did writing and literature come into being?

Many historians concur that writing came into existence in Mesopotamia in the fourth millennium BCE, although isolated texts from Greece, Romania, Egypt, and China from the sixth millennium BCE are also under consideration. Ultimately, the exact point of origin of writing is less important than the fact that the most substantial evidence we have of early writing systems is from Mesopotamia (current Iraq) and that early writing was designed as a means of accounting for agricultural goods, not for literature. Writing comes into being as technology designed for accounting and supply maintenance. Its adaptation for literary purposes is much later; one thinks, for example, of the Middle Babylonian Epic of Gilgamesh of the Egyptian texts pertaining to the afterlife.

Literature, it should be stressed, has its roots in oral tradition, not in writing. In the context of Ancient Greece, for example, the oral traditions that would later be codified into the written Homeric epics were maintained through memory and song, not through textuality. As early as the eighth century BCE (some scholars point toward the seventh century BCE instead), writing had come into play not only in Ancient Greece but in Ancient Israel as well, as demonstrated by some of the earliest prophetic texts. Writing, then, shows up in the Ancient near the eastern and later pan-Mediterranean environment for varied purposes, including the singing of laws. Singing the laws enabled the largely illiterate populace to memorize the dicta of the law, by virtue of meter and stock, idiomatic phrasing.

Poetry, and indeed "literature" as such, is a late development in the career of written language. We should look first to priestly book-keeping, agriculture, accounting, and the law before we look to writing in the context of literature. To be sure, writing is prominently known for its literary role today, but at its inception, it was a working technology employed by priestly record-keepers and lawmakers.

How did literature originate?

The different genres we now consider literary originated at different times and in different contexts. Epic and wisdom poetry was rooted in oral tradition before speech was invented and served to preserve important cultural memories about gods, heroes, ancestors and cultural traditions in performance. Lyric poetry was primarily entertainment, usually accompanied by music. Tragic and comic poetry originated in archaic Greece and were originally performed as parts of religious festivals and the prose novel originated in the Hellenistic period.

The general notion of "literature" per se was Hellenistic, when we find terms like "paideia", "grammata", and "littera" applied to a canon of works studied by students learning to read; these were works chosen as culturally significant and knowing them was essential to being considered an educated person.