This thesis examines changes in the relationship between romance and realism in the New Zealand short story over a period of one hundred years, from approximately 1865 to 1965. I argue that the short story is inherently a romantic genre and that both realism and romance are constant elements. My purpose is to show an evolving pattern between the two modes of writing during the rise of realism which began in the nineteenth century and peaked in the postwar period. Because there is a fluctuating relationship between the two modes in New Zealand short fiction, it is possible, through the psychoanalytical approach to the stories which I employ, to establish the prevailing emotional climate of each era. Beginning with the colonial period, I show how the magazine influenced fiction writing by initiating some important changes to the European New Zealand short story. I discuss the attempt by male writers of the 1930s to dominate the literary scene by using realism as a weapon. Then, with Katherine Mansfield and Frank Sargeson as the models for postwar writers, I illuminate through my analysis of the texts, a new coalition of romantic realism.