World literature is used to refer to the world's total national literature and the circulation of works into the wider world beyond their country of origin. In the past, it primarily referred to the masterpieces of Western European literature. However, world literature today is increasingly seen in an international context. Now, readers have access to a wide range of global works in various translations.

Many scholars assert that the circulation beyond its country of origin is what makes a work considered world literature. For example, David Damrosch states, "A work enters into world literature by a double process: first, by being read as literature; second, by circulating out into a broader world beyond its linguistic and cultural point of origin". Likewise, world literature scholar Venkat Mani believes that the "worlding" of literature is brought about by "information transfer" largely generated by developments in print culture. Because of the advent of the library, "Publishers and booksellers who print and sell affordable books, literate citizens who acquire these books, and public libraries that make these books available to those who cannot afford to buy them collectively play a very important role in the "making" of world literature".

Johann Wolfgang Goethe used the concept of world literature in several of his essays in the early decades of the nineteenth century to describe the international circulation and reception of literary works in Europe, including works of non-Western origin. The concept achieved wide currency after his disciple Johann Peter Eckermann published a collection of conversations with Goethe in 1835. Goethe spoke with Eckermann about the excitement of reading Chinese novels and Persian and Serbian poetry as well as of his fascination with seeing how his own works were translated and discussed abroad, especially in France. He made a famous statement in January 1827, predicting that world literature would replace national literature as the major mode of literary creativity in the future:

I am more and more convinced that poetry is the universal possession of mankind, revealing itself everywhere and at all times in hundreds and hundreds of men. ... I therefore like to look about me in foreign nations, and advise everyone to do the same. National literature is now a rather unmeaning term; the epoch of world literature is at hand, and everyone must strive to hasten its approach.

Reflecting a fundamentally economic understanding of world literature as a process of trade and exchange, Karl Marx and Friedrich Engels used the term in their Communist Manifesto (1848) to describe the "cosmopolitan character" of bourgeois literary production, asserting that:

In place of the old wants, satisfied by the productions of the country, we find new wants, requiring for their satisfaction the products of distant lands and climates. ... And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

Martin Puchner has stated that Goethe had a keen sense of world literature as driven by a new world market in literature. This market-based approach was sought by Marx and Engels in 1848 through their Manifesto document, which was published in four languages and distributed among several European countries, and has since become one of the most influential texts of the twentieth century. While Marx and Engels followed Goethe in viewing world literature as a modern or future phenomenon, the Irish scholar H. M. Posnett argued in 1886 that world literature first arose in ancient empires, such as the Roman Empire, long before the rise of modern national literature. Today, world literature is understood to encompass classical works from all periods, including contemporary literature that is written for a global audience.

In the postwar era, the study of comparative and world literature was revived in the United States. Comparative literature was seen at the graduate level while world literature was taught as a first-year general education class. The focus remained largely on the Greek and Roman classics and the literature of major, modern Western-European powers, but a combination of factors in the late 1980s and early 1990s led to greater access to the world. The end of the Cold War, the growing globalization of the world economy, and new waves of immigration led to several efforts to expand the study of world literature. This change is illustrated by the expansion of The Norton Anthology of World Masterpieces, whose first edition in 1956 featured only Western-European and North American works, to a new "expanded edition" in 1995 with non-Western selections. Major survey anthologies today, including those published by Longman, Bedford and Norton, showcase several hundred authors from dozens of countries.