In this thesis I argue for a repositioning of Edith Wharton’s short stories in relation to both the twentieth century and modernism. Whilst Wharton was acclaimed for her novels, I argue that the short story, the genre in which she felt most proficient as a writer, yet is still habitually overlooked by critics, presents Wharton at her most experimental and "renovat(ive)", to use her own words. I consider how the restrictive confines of the short story, both in terms of its brevity and commercial value, particularly in relation to the magazine market, were exploited by Wharton to her own advantage, and how her literary craft flourished in such a contained form. I do not argue for a re-envisioning of Wharton as a modernist writer, rather for recognition of her modernist tendencies both in terms of her narrative technique and her interaction with the literary marketplace. Accordingly this thesis is divided into two parts; the first considers Wharton's poetics: her use of myth, modes of narration, creation of narrative gaps, and her notable use of ellipsis points (closely associated by critics such as Henry with modernist writing). The second part of this thesis explores Wharton's modernist practices outside her texts. Here I investigate Wharton's short story magazine publication history, outlining the uneasy balance between her challenges to editorial policy in both the Gilded Age and Progressive Era, and her businesslike attitude toward the profession of writing. Finally, given recent critical reassessments of modernism and its relationship with both the short story and the magazine industry, I argue for the timely recognition of the distinctly modernist nature of Wharton's popular, mass marketed short fiction.