Kosta Khetagurov, the founder of Ossetian literature, considered folklore interaction to be the most important artistic and aesthetic category, which largely determined the development paths of the national literature that was forming in the 19th century. A category that in the history of our literature has only become more and more conceptualized over time, giving rise to major qualitative changes. Despite the complex nature of the political and ideological processes that took place in the 19th century, Kosta sought to preserve the national essence of the cultural traditions of the Ossetians. In his work, he clearly and consistently asserted the ontological aspect of the national existence of the Ossetians, everyday national life and national character. This is the axiological value of literary and folklore interaction, in which Kosta singled out artistic mythologism and artistic folklorism as its two most important structural and substantive directions. At the same time, creating his system of artistic mythologism and artistic folklorism, Kosta defined the national traditions of the Ossetians and their ancestors as the highest, spiritual value. And among them, first of all, the national character (Kubady, Fatima), the rituals of the Ossetians (At the Cemetery, Fatima, Akhsiny Læg), the history of the Ossetians (Osoba, Khetag, etc.), social justice (Dodoi, Vsati, Nadezhda, etc.), nature, man, conscience, honor, dignity, etc. In artistic mythologism and artistic folklorism, i.e. the main structural and substantive directions of literary and folklore interaction, Kosta valued the ability to reflect the civilizational heritage of the Ossetians and their ancestors as the basis for the reproduction or revival of their national self-awareness. According to Kosta, on this basis the cultural and historical paradigm should have been formed in the 19th century. The aim of this article is to analyze the path of further development of such important structural and substantive directions of literary-folklore interaction as artistic mythologism and artistic folklorism at the beginning of the 20th century, and the continuation in them of Kosta Khetagurov’s conceptual ideas about the existential-ontological foundations of national life and national character, “corrected” by new socio-historical circumstances.