This chapter focuses on Xu Xu’s fiction from the 1930s and 40s, providing analyses of his main short stories and novels from this period, demonstrating how Xu’s work transitioned from modernist experimentation to popular romances after his return from studies in France. Xu’s bestselling short stories and novels were often set abroad and featured exotic, otherworldly characters, such as ghosts, spies, pirates and gypsies. In many of these works, the cosmopolitan, rational and educated male protagonist encounters a mysterious, elusive, otherworldly woman. Eventually, the truth is revealed and the mysteries are uncovered, vindicating the modern outlook of the male narrator. With their references to traditional literature, abnormal psychology and sexual desire, such works frequently echo Shi Zhecun and Mu Shiying’s writings from a decade earlier, yet Xu’s writings are mainly escapist entertainment rather than an attack on rational modernity or the status of art in society.