Abstract: In the history of Chinese ancient novel theory, the 17th Century is undoubtedly an important stage of the breakthrough of novel concept, and the literature-history circulation of the Tales of Xie Xiao'e can exactly outline the changes of the ideas of the ancient novels. In the history of the circulation, according to their own needs of the transformation, the adapter adapted it, which showed great changes of the ancient Chinese novel concept. At the same time, in the ancient Chinese novel concept, the novel does not correspond with the fiction, but is closely related to the "truth", which provides an opportunity for the Tales of Xie Xiao'e transferring from literature to history. The historical tendency of novels and the values have provided the foundation for the ancient works that literature has transferred to history. At the same time, "literature-history" circulation in the Tales of Xie Xiao'e shows that the modern transformation of the concept of ancient Chinese novels is very arduous and tortuous.