A psychological novel, also called psychological realism, is a work of prose fiction which places more than the usual amount of emphasis on interior characterization, and on the motives, circumstances, and internal action which springs from, and develops, external action. The psychological novel is not content to state what happens but goes on to explain the motivation of this action. In this type of writing character and characterization are more than usually important, and they often delve deeper into the mind of a character than novels of other genres. The psychological novel can be called a novel of the "inner man", so to say. In some cases, the stream of consciousness technique, as well as interior monologues, may be employed to better illustrate the inner workings of the human mind at work. Flashbacks may also be featured.

The Tale of Genji, written in 11th century Japan and often considered to be the first novel, has been called the first psychological novel. In the west, the origins of the psychological novel can be traced as far back as Giovanni Boccaccio's 1344 La Fiammetta; that is before the term psychology was coined. Another avant la lettre example is Don Quixote de la Mancha by Miguel Cervantes.

The first rise of the psychological novel as a genre is said to have started with the sentimental novel of which Samuel Richardson's Pamela is a prime example.

In French literature, Stendhal's The Red and the Black is often called an early psychological novel. Madame de La Fayette's The Princess of Cleves, dating back to the 17th century, is also considered an early precursor of the psychological novel. Knut Hamsun's debut-novel Hunger is widely recognized as the most significant psychological novel.