Literary theory in a strict sense is the systematic study of the nature of literature and of the methods for analyzing literature. However, literary scholarship since the 19th century often includes—in addition to, or even instead of literary theory in the strict sense—considerations of intellectual history, moral philosophy, social prophecy, and other interdisciplinary themes which are of relevance to the way humans interpret meaning. In humanities in modern academia, the latter style of scholarship is an outgrowth of critical theory and is often called simply "theory." As a consequence, the word "theory" has become an umbrella term for a variety of scholarly approaches to reading texts. Many of these approaches are informed by various strands of Continental philosophy and sociology.

The practice of literary theory became a profession in the 20th century, but it has historical roots that run as far back as ancient Greece (Aristotle's Poetics is an often cited early example), ancient India (Bharata Muni's Natya Shastra), ancient Rome (Longinus's On the Su]) and medieval Iraq (Al-Jahiz's al-Bayan wa-'l-tabyin and al-Hayawan, and ibn al-Mu'tazz's Kitab al-Badi), and the aesthetic theories of philosophers from ancient philosophy through the 18th and 19th centuries are important influences on current literary study. The theory and criticism of literature are, of course, also closely tied to the history of literature.