Setsuwa means "spoken story". As one of the vaguest forms of literature, setsuwa is believed to have been passed down or presented in the form of narrations. Setsuwa are based foremost on oral tradition and existed primarily as folktales or in other non-written forms before being recorded and committed to text. However, some writers question whether all setsuwa tales were originally oral tradition, or only mostly so. Although there are no formal rules regarding what constitutes setsuwa as a genre, stories in the setsuwa style "have in common brevity; an uncomplicated plot unfolded in plain, direct language; character delineation through dialogue and action rather than through description and psychological analysis; and a predilection for amusing, starting, dramatic, or marvelous subject matter."
Setsuwa vary quite considerably in topic, but can be divided into two main groups: general and Buddhist. Buddhist setsuwa often contain themes of karmic retribution or miracles, while the content of “general” setsuwa is largely either secular in nature or focused on traditional Japanese religion and spirituality such as Shintoism.
Many setsuwa collections were compiled during the Heian and Kamakura periods (8th-12th centuries, 12th-14th centuries). These collections were often assembled by Buddhist monks, but the authorship of many such works is still unknown or heavily debated.
Setsuwa may be found integrated in other literature or in setsuwa collections. The myths found within Kojiki (712) are the oldest individual ones known to exist. The Nihon Ryōiki (c. 822) is the oldest setsuwa collection.
The setsuwa genre last until the early 14th century when it was succeeded by the otogizōshi genre.