This analysis of the structure and meaning of The Tale of the Hunchback, the most novelistic of the tales of the Thousand and One Nights, shows how the Nights stages the relationship of reader to fiction (the fictitious lives of others) as a power relationship and in terms of distance and familiarity. Through its juxtaposition of stories, the tale anatomizes fortunate and unfortunate human lives; it dramatizes the latter through the practical joke. The tale and its storyteller, Shahrazad, try to teach brotherhood and compassion for human weakness to a reader figured as an all-powerful Caliph-King who demands to be amused by the strange and who laughs at stories of the unfortunate. This reader’s power vis-à-vis the stories presented to him is above all to dismiss them as fictions that do not apply to him, as freakish as the deformed hunchback entertainer for whom the stories substitute within the tale. The tale and the larger Nights show how the estrangement that is the means of literary fiction can lie at cross-purposes with the ethical end of self-recognition and empathetic identification with others.