Stream of Consciousness was a phrase used by William James in his Principles of Psychology (1890) to describe the unbroken flow of perceptions, thoughts, and feelings in the waking mind; it has since been adopted to describe a narrative method in modern fiction. Long passages of introspection, in which the narrator records in detail what passes through a character's awareness, are found in novelists from Samuel Richardson, through William James' brother Henry James, to many novelists of the present era. The long chapter 42 of James' Portrait of a Lady, for example, is entirely given over to the narrator's description of the process of Isabel's memories, thoughts, and feelings. As early as 1888 a minor French writer, Edouard Dujardin, wrote a short novel Les Lauriers sont coupe's ("The Laurels Have Been Cut") which is a rather crude but sustained attempt to represent the scenes and events of the story solely as they impinge upon the consciousness of the central character. As it has been refined since the 1920s, stream of consciousness is the name applied specifically to a mode of narration that undertakes to reproduce, without a narrator's intervention, the full spectrum and continuous flow of a character's mental process, in which sense perceptions mingle with conscious and half-conscious thoughts, memories, expectations, feelings, and random associations.

Some critics use "stream of consciousness" interchangeably with the term interior monologue. It is useful, however, to follow the usage of critics who use the former as the inclusive term, denoting all the diverse means employed by authors to communicate the inclusive state and process of consciousness in a character. "Interior monologue" is then reserved for that species of stream of consciousness which undertakes to present to the reader the course and rhythm of consciousness precisely as it occurs in a character's mind. In interior monologue the author does not intervene, or at any rate intervenes minimally, as describer, guide, or commentator, and does not tidy the vagaries of the mental process into grammatical sentences or into a logical or coherent order. The interior monologue, in its radical form, is sometimes described as the exact presentation of the process of consciousness; but because sense perceptions, mental images, feelings, and some aspects of thought itself are nonverbal, it is clear that the author can present these elements only by converting them into some kind of verbal equivalent. Much of this conversion is a matter of narrative conventions rather than of unedited, point-for-point reproduction, and each author puts his or her own imprint on the interior monologues that are attributed to characters in the narrative. (For the linguistic techniques that have been used to render the states and flow of consciousness, see Dorrit Cohn, Transparent Minds: Narrative Modes for Presendng Consciousness in Fiction, 1978.)

James Joyce developed a variety of devices for stream-of-consciousness narrative in Ulysses (1922). Here is a passage of interior monologue from the "Lestrygonian" episode, in which Leopold Bloom saunters through Dublin, observing and musing:

Pineapple rock, lemon platt, butter scotch. A sugar-sticky girl shoveling scoopfuls of creams for a christian brother. Some school treat. Bad for their tummies. Lozenge and comfit manufacturer to His Majesty the King. God. Save. Our. Sitting on his throne, sucking red jujubes white.

Dorothy Richardson sustains a stream-of-consciousness mode of narrative, focused exclusively on the mind and perceptions of her heroine, throughout the twelve volumes of her novel Pilgrimage (1915-38); Virginia Woolf employs the procedure as a primary, although not exclusive, narrative mode in several novels, including Mrs. Dalloway (1925) and To the Lighthouse (1927); and William Faulkner exploits it brilliantly in the first three of the four parts of The Sound and the Fury (1929). [from: Abrams, 1999]