Originally derived from historical and philosophical writings, xiaoshuo is the modern Chinese term for fictional work of any length. However, how this term came to be used to translate the Western concepts of “fiction” and “novel” is a question that remains to be fully explored. This paper focuses on Lu Xun’s seminal work Zhongguo xiaoshuo shilüe (A brief history of Chinese fiction; 1925) so as to investigate the ways in which the Western concept of fiction is built into Lu Xun’s historicization of xiaoshuo. I argue that Lu Xun’s articulation of xiaoshuo is distinguished by his emphasis on both the term’s universality and its “Chinese-ness.”