Henry James's essay, one of the most famous and widely cited theoretical discussions of the novel, is a response Walter Besant's lecture "Fiction as One of the Fine Arts." In his lecture, Besant argues that the novel is a fine art on par with painting, sculpture, music, and poetry and then lays down a list of general compositional rules that, if taught, will allow for the creation of better novels.

James agrees with Besant's claim that the novel has a powerful aesthetic importance, but he disagrees heavily with his attempt to set down prescriptive rules that would aid in the novel's composition. Instead, James believes that the only task of the novelist is to be as true to life as possible. In his own words, "A novel is in its broadest definition a personal impression of life; that, to begin with, constitutes its value, which is greater or less according to the intensity of the impression." His statement recalls George Eliot's memorable assertion that the novel is "the nearest thing to life," one of the primary assumptions on which the realistic genre (of which James is a consummate practitioner) was predicated.

James's rhetorical method throughout the essay is shrewd and light-hearted. He rarely disagrees outright with Besant's assertions, but he sets down many carefully veiled critiques of his reasoning. James argues that Besant's claims are unhelpful in being vague. Most of his assertions—that the novel must have clearly defined characters, be written from experience, and serve an explicit moral function—are impossible to disagree with, but only because they are so general. According to James, it is precisely their broadness that makes them objectionable. Take, for example, Besant's claim that novelists must write from experience, that a writer from the middle class should refrain from writing about high society. James, like his philosopher brother William, believes that true experience consists fundamentally of accumulated mental impressions, not socioeconomic status. It is therefore entirely possible for an attentive writer from the middle class to paint an extraordinarily true portrait of the upper class, provided only that he/she is observant.

James concludes the essay with an encouraging statement directed at young novelists. He congratulates them at having chosen a noble art form to pursue and then urges them to write about any and every subject, paying no heed to criticism from society.