The article is devoted to “Literary Tale” by Lyudmila Petrushevskaya in the context of modern literary process. For this reason, two aspects were analyzed: the main characteristics and phenomena of contemporary literature of the era of postcolonialism and postmodernism, and the individual manner of mastering and transforming Lyudmila Petrushevskaya’s fairy tale, related to these phenomena. In the article analyzed scientific sources and found that literary studies and, to a lesser extent, the linguistic and stylistic, dramatic, prose and tale specificity of Lyudmila Petrushevskaya’s creativity have repeatedly been the subject of study by a number of domestic and foreign scholars. Scientists explored L. Petrushevskaya’s tales in particular in comparative, compositional, figurative, cognitive (metalinguistic), anthroponymic aspects. Researchers analyzed connection with folklore, literary fairy tale of other authors, modern trends of literature, postmodern trends in art. Also we found that the common approach is the formal choice of fairy tales as objects of study: by period, by collection, by cycle. However, the preliminary analysis revealed that there are almost none comprehensive studies of the formation of the literary fairy tale genre in the writer’s work. Methods. Following methods are used in the research: analysis of secondary sources (literary studies), structural analysis, linguistic and stylistic analysis of expressive means, elements of phenomenological, deterministic (causes and effect) and comparative analysis. Results. We proved that the choice of the fairy tale genre as a frame (a common genre creation of fairy tale characters) by modern writers and, in particular, by L. Petrushevskaya fully responds to the needs of readers. Readers consume a “literary product” as a collage, a new combination of proven and even archetypal narratives, against which the problems of the modern urban philistine world are particularly striking. Postmodern features are present in the author’s works in concentrated form, but they have evolved, in comparison with the first dramatic works of the author, towards to universality and timelessness (by interpenetration of archaic and innovative realities). These factors can explain the great popularity of the author’s tales. Conclusions. We found that the contemporary literary fairy tale of Lyudmila Petrushevskaya is created on the basis of: a) typical archetypal narrative structures; b) the author’s own sensual and cognitive experience; c) individual existential treatment by the writer of all available cultural experience in the context of the trends of postmodernism. The fairy tale can no longer be an isolated system and undergoes constant transformations, both at writing and at perception. Based on the aforesaid, we found that the author’s fairy tale of Lyudmila Petrushevskaya has a number of features related to contemporary literary trends, namely: a) author’s poetry based on the play; b) the presence of the author’s image and the inability to fully describe the artistic picture and the idea of her work; c) quest plot’s type and new binary categories that drive conflict; d) synthetics and heterogeneity of genre-forming features; e) intertextuality and allusion; f) transformation of typical fairytale structures; g) changes in time dimension; h) modernization of magical objects and magical transformations.