Which essay by J.R.R. Tolkien discusses the nature and value of fairy-stories?

Tolkien's essay discussing the nature and value of fairy-stories is On Fairy-Stories.

Tolkien originally delivered On Fairy-Stories as the Andrew Lang Lecture at the University of St Andrews in 1938. The essay was later published in expanded form and became one of his most influential statements about fantasy and storytelling.

In it, Tolkien argues that fairy-stories are not merely children’s entertainment. He identifies important functions of fantasy, including recovery, escape, and consolation, and explains how a secondary world can be made believable through internally consistent rules.

The essay is often read alongside Tolkien's fiction because it describes principles visible in Middle-earth. Its discussion of eucatastrophe—the sudden joyful turn in a story—also helps explain Tolkien's view of hope within a tragic narrative.