The second half of the nineteenth century saw the development of modern literature through the impetus of serious criticism based on German and French philosophical thought and cultural trends. The period was dominated by Vasile Alecsandri and Mihail Eminescu. During Alecsandri's long career, he produced outstanding works in every form of literary expression—prose, poetry, drama, and nonfiction. Together with Negruzzi and Kogalniceanu, he was one of the early directors of the National Theatre in Iasi.

Eminescu is Romania's outstanding poet and holds his place among the important poets of the world. His lyrical poetry is influenced by Romanian folklore, Hindu thought, and German philosophy. His ballad Luceafarul (Evening Star) is a well-known classic. In addition to poetry, Eminescu wrote short stories and political and philosophical essays. He was one of the leaders of the Junimea, a literary circle for youth in Iasi, which was founded by the important critic Titu Mairescu. Other important members of the circle were Ion Luca Caragiale, a playwright who first introduced social comedy to Romania, and Ion Creanga, who wrote about the peasant life from which he stemmed.

Around the beginning of the twentieth century the growing popularity of peasant themes and descriptions of peasant life in the writing of such authors as Ion Slavici and Gheorghe Cosbuc led to the publication of a new literary periodical, Samanatorul, and the development of a literary school that took its name. The school stressed the national heritage of Romania, its folklore, and its rustic life as subjects for literary creation, in contrast to the cosmopolitan outlook of the Junimea circle.

Parallel to the Samanatorul school developed poporanism (of the people), which was similar to the then-current Russian populism in its social and political motivation. Its organ was Viata Romaneasca, which featured populist causes.

Several writers remained apart from any of the schools. Among them was Barbu Delavrancea, well-known for his trilogy about Stephen the Great and for stories of Walachian peasant life, and the poet Alexandru Macedonski, who introduced French symbolism to Romanian literature.

The period between the two world wars gave rise to the novel, which quickly took its place beside lyrical poetry as an important form of literary expression. An important contributor to the development of the novel was Liviu Rebreanu, whose Forest of the Hanged is a powerful description of the horrors of war. His other important novels are Ion, dealing with peasant life, and Ciuleandra, a psychological novel.

Mihail Sadoveanu, whose most important works were published in the 1920s and 1930s, is considered the foremost realist of the twentieth century. His writings deal mostly with history and with peasant life. In 1924 he won the national prize for literature, and in 1949, the Gold Peace Medal.

Outstanding interwar poets were Lucian Blaga, Ion Barbu, and Tudor Arghezi. Blaga's poetry was an exposition of his philosophy based on the traditional way of life interpreted as a cosmic mystery. Barbu's poems are of an abstract and esoteric nature. Arghezi is considered the greatest poet since Eminescu on the basis of his use of language and symbolism.

Immediately after World War II poetry again took the lead in literary expression. Although much prose was published, none of it was considered of particular importance. The poetry can be divided into three main schools: surrealist poetry, poetry of spiritual revolt, and a return-to-tradition balladry.

Several of the prewar writers and poets continued to produce after the communist takeover and subjected themselves to the constraints of Socialist Realism. Among them were Sadoveanu, Calinescu, Camil Petrescu, and Arghezi. Others were denounced for their previous writings and became silent. The literary output of the 1950s is generally regarded as second rate. Several notable novels, however, were published in the early 1960s. Among them were George Calinescu's Bietul Ioanide (Poor Ioanide), Ion Sadoveanu's Ion Sintu (Saint John), and Petru Dimitriu's Cronica de Familie (Family Chronicle). Of particularly outstanding merit and lasting quality are Marin Preda's peasant epic Morometii (The Moroments) and Eugen Barbu's naturalist novel Groapa (The Trench).