In place of dealing with a text in isolation from its historical context, new historicists attend primarily to the historical and cultural conditions of its productions, its meanings, its effects, and also of its later critical interpretations and evaluations. This work is critical interpretation of a Nepali novel Palpasa café by Narayan Wagle which tries to see the Nepalese history in the form of fiction. It provides the balanced view of fiction and history that history after being expressed in the form of words can be viewed as a fictional entity. Written lucidly and in language that is jargon free, Fictionalization of History in Narayan Wagle''s Palpasa Café, should be of interest not only to the serious students and the critics but to anyone willing to engage in the research work and nourishing ideas. The thoroughness of the discussions, clarity of the arguments and the wide spectrum of sources are its other merits.