Based on the example of grim ghost in “Huapi” story of Liaozhai zhiyi, this paper aims to analyse attributes of the signifier and signified presented in this novel and then discuss their significance and relation to the succession and expansion in traditional novels. This paper will be mainly divided into four parts. Firstly, a general analysis on all ghost stories in Liaozhai zhiyi will be made thoroughly. According to their different attributes of the signifiers, the ghosts can be mainly classified into two types: (1) the ghost with the character of human; and (2) the ghost with the character of hobgoblin. In the case of “Huapi” story, the grim ghost is with both these two characters, namely, the grim ghost is a signifier with duality. Secondly, this duality in the grim ghost's signifier and its signified will be examined for the analysis of its system of signification. Thirdly, the stories about female ghosts in short novels of different dynasties will be analysed in terms of the attributes of narratives and signification of the ghost's role, which will then be taken in contract to the analysis on grim ghost to show the trajectory of the succession and expansion of “Huapi” stroy in the traditional novel's system of signification. Finally, based on the above analysis and contrast, the conclussion suggests that the artistic attribution of this novel in the succession and expansion of the traditional novel's system of signification will reveal the significance, in terms of semiotic aesthetics, of Pu Songling's Liaozhai zhiyi in the traditional novel history.