The storytelling novel is one of China's classical novels, which was popular in the Song and Yuan Dynasties. With the prosperity of commodity economy and the rapid increase of urban population, popular folk literature has also developed unprecedentedly in the Song Dynasty, and storytelling novels are the representatives of folk literature in the Song Dynasty. Vernacular novels in Song Dynasty are completely different from the long-term literary tradition of classical Chinese in ancient China. This is the first time in the history of China's novels to create vernacular novels, which is an outstanding progress. In the aspect of characterization, the vernacular novels in Song Dynasty are dominated by ordinary characters, and extraordinary characters are no longer the main object of characterization, which is a sign that China's novels are becoming popular. In addition, the story-telling mode of vernacular novels in Song Dynasty is to unfold the story in the scene of "telling", which later became the classic narrative mode of vernacular novels.