This thesis emphasizes the significance of readers’ emotional engagement with characters in the process of reading novels which, in turn, plays a critical role in the reflective moral transformation of the reader. It approaches the analysis of the relationship between emotions, literature and ethics from the perspective of the perceptual theory of emotions. My claim is that our imaginative engagements with narrative fictions, and particularly realist novels, by triggering a critical reflection process through the arousal of our emotions, might prove to be a morally transformative experience. Reflective moral transformation is defined as a deepening of one’s moral understanding that often involves a shift in one’s perspective that comes about as a result of a critical reflection of one’s existing moral beliefs. As such, it entails a willingness to scrutinize one’s moral beliefs and to improve one’s moral understanding. I put forward here a model that will satisfactorily explain how engagement with realist novels can serve to morally transform ourselves.