Though genre fiction is now ubiquitous, and though both book history and literary studies have devoted considerable attention to individual genres like science fiction and romance novels, the history of the system of popular fiction categories has been little studied. This essay traces the origins of the genre-fiction system in United States magazine and book publishing, bringing sociological and book-historical analysis to bear on changing practices of categorization in publishing, advertising, librarianship, and reader response from the 1890s through the 1950s. Genre categories were only intermittently in use through the 1910s; they were first institutionalized in pulp magazines in the 1920s and 1930s. The genre-fiction system was transmitted to book publishing only in the course of the so-called "paperback revolution" of the 1940s and 1950s, which made room for fiction-book production by categories while relegating it to a permanently low-status position. This transmission across publishing formats was far from deliberate; instead, the essay argues, the system of genre fiction arose and endured as a stable compromise articulating an expanded fiction-reading public to an expansive print culture industry, making new readers and new fiction---and new kinds of fiction---regularly available to each other in an enduringly hierarchized field.