New Historicism is a critical approach which considers power relations as the most important context for all kinds of texts. This theory was formulated in the early 1980's by Stephen Greenblatt as a reaction to formalistic approaches. By reinterpreting the notions of and culture, New Historicists brought a new outlook on literary studies. They define literature as a product of political, social, religious and cultural power operations. New historicism requires the study of literary texts in relation to other texts from various fields. The practice shifts the border between literature and history claiming that like literature history passes through a process of selection. New Historicism was influenced by both Marxism and Anthropology and focused on concepts such as ideology, power relations and culture. The main influence on New Historicism was Michel Foucault. Foucault's views on the concept of discontinuity in history made a great contribution to the theory. The ultimate aim of this paper is to introduce New Historicism which has become an influential practice in the discipline of literary studies.