This essay provides a critical analysis regarding the basis of genre distinction in a literary novel: What is the epistemological and ontological locus of this basis? The thesis the au­thor elucidates and defends is that theme constitutes the basis of genre distinction in a lit­erary novel; it exists as a potentiality in the literary dimension of the novel qua signifi­cant form. This paper is composed of three parts. The first part focuses on the basis un­derlying the literary dimension of the novel, namely, art: possession of aesthetic qualities is what renders a novel a literary work of art. The second part argues that, as the basis of genre distinction, theme exists as a potentiality in the literary dimension of the novel. The third part illustrates in some detail how theme comes to life as a world of meaning in the aesthetic experience. If possession of aesthetic qualities is what renders a novel a literary work of art, if the literary dimension inheres in the novel as a potentiality capa­ble of significant form, if theme exists in the literary dimension of a novel, it should fol­low that theme does not exist in the novel as a story but as a literary work, that is, as a po­tentiality in its literary dimension and nowhere else. Accordingly, the literary work of art should, and can, declare its genre identity.