Korean Novel written in Chinese "The dream of Yu Xian" was medium serial novel, which was of visionary novel work same as the legend of Tang Dynasty. "The Dream in the Pillow" and "The Tale of Magistrate Nanko". To investigate their motifs, writing skills and characteristics, one would find among them there were many things in common. In addition, there were certain episodes on "The Dream of Yu Xian" adopted directly from "The Dream in the Pillow" and "The Tale of Magistrate Nanko" two stories, which showed they were closely related. This study will aim at the relationship of heritage and innovation between "The Dream of Yu Xian" and "The Dream in the Pillow" & "The Tale of Magistrate Nanko" to prove that "The Dream in the Pillow" and "The Tale of magistrate "Nanko" originally from China actually had significant impact on the creation of the Korean Novel written in Chinese "The Dream of Yu Xian".