Which Tolkien essay explains his theory of fantasy’s three functions?

J.R.R. Tolkien’s essay explaining fantasy’s three functions is On Fairy-Stories.

Tolkien developed the essay from a lecture delivered at the University of St Andrews in 1938. In it, he discusses the nature and purpose of fairy stories and argues that they can offer recovery, escape, and consolation.

Recovery means seeing familiar things afresh. Escape, in Tolkien’s account, is not automatically cowardice; it can distinguish a prisoner’s escape from the desertion of a soldier. Consolation includes the idea of the eucatastrophe, a sudden joyful turn that provides hope.

The essay is often confused with Tolkien’s fiction because it sets out ideas that appear in his stories. It is a work of literary criticism and theory, not a narrative from Middle-earth. Its arguments remain central to discussions of modern fantasy literature.