For the literary critic Mikhail Bakhtin, the carnivalesque is both the description of a historical phenomenon and the name he gives to a certain literary tendency. Historically speaking, Bakhtin was interested in great carnivals of medieval Europe. He saw them as occasions in which the political, legal and ideological authority of both the church and state were overturned — albeit temporarily — and replaced with the anarchic and liberating world of the carnival. The carnival was liberating not simply because for that short period the church and state had little or no control over the lives of the revellers (as the critic Terry Eagleton has pointed out, this would be 'licensed' transgression at best). Rather, it was liberating in that the carnival — in particular, the idea that set rules and beliefs were not immune to ridicule or reconception — 'cleared the ground' for new ideas to enter into public discourse. Bakhtin goes so far as to suggest that the European Renaissance itself was made possible by the spirit of free thinking and impiety that the carnivals engendered.

Bakhtin recognises that the tradition of carnival dwindled in Europe following the Renaissance and the eventual replacement of feudalism with capitalism. As a result, he says, the public spirit of the carnival metamorphosed into the 'carnivalesque': that is, the spirit of carnival rendered into literary form. The person who, existing on the cusp of this social upheaval, most fully represented this spirit was Francois Rabelais, and the book which holds the greatest purchase on Bakhtin's imagination is Rabelais' Gargantua and Pantagruel. The comic violence, bad language, exaggeration, satire, and shape-shifting which fill this book are, for Bakhtin, the greatest example of carnivalesque literature. Ever concerned with the liberation of the human spirit, Bakhtin claimed that carnivalesque literature — like the carnivals themselves — broke apart oppressive and mouldy forms of thought and cleared the path for the imagination and the never-ending project of emancipation.

Bakhtin suggests that carnivalesque literature also became less common as the increasingly privatised world of modern, individualistic capitalism took hold. However, he points to some notable exceptions: most importantly Fyodor Dostoevsky, but also (in a brief note) Ernest Hemingway.