The article explores the problematic assumptions underlying the traditional view that literature deals with the realm of the possible and history with the realm of the actual. This dichotomy risks dismissing how a sense of the possible constitutes an important dimension of every actual world, how literary fiction provides interpretations of actual worlds, and how it has its own literary means of giving us a sense of a past world as a space of possibilities. This argument is developed by analysing Jonathan Littell's Les Bienveillantes (2006, The Kindly Ones), which has created a heated controversy on the contribution of literature to the understanding of the Holocaust. The article contributes to developing narrative hermeneutics as an approach which, first, suggests that both historiography and fiction are ways of interpreting the world past and present, and, second, is sensitive to how fiction requires specific modes of interpretation and engagement. The analysis of Littell's novel shows that the interplay between immersiveness and critical distance can produce a narrative dynamic that allows the reader to engage emotionally with an ethically problematic lifeworld without uncritically adopting the protagonist's perspective. One important way in which fiction can produce insights into history is its ability to cultivate, through its specifically fictional means, a sense of history as a sense of the possible while at the same time reflecting on the conditions and limits of narrating, representing and understanding history.