The modern period in Urdu literature, can be counted from the termination of the Mughal Empire with Bahadur Shah Zafar and his Urdu-penning genius, and the beginning of the prolonged colonial rule in India. The First War of Indian Independence, legendary as the Sepoy Mutiny, was crucial in the regard of producing several Urdu litterateurs, both in the arena of prose and poetry. Modern Urdu literature during the pre-independence period, also had given birth to several revolutionary thinkers, comprising fiery commentaries, Hindu writers in the Persian language and, birth of the short story. During the post-Mizra Ghalib period, Dagh (b. 1831) had emerged as a prominent poet, whose poetry was noted by its purity of idiom and minimalism of language and thought.

By the beginning of the 18th century, the modern period in Urdu literature, a more stylish and classy North Indian variation of the language began to move forward through the authorships of Shaikh Zahooruddin Hatim (1699-1781 AD), Mirza Mazhar Jan-e-Janan (1699-1781 AD) Khwaja Mir Dard (1719- 1785 AD), Mir Taqi Mir (1722-1810 AD), Mir Hasan (1727-1786 AD) and Mohammed Rafi Sauda (1713-1780 AD). Mir`s works, apart from his six Diwans, comprise Nikat-ush-Shora (Tazkira) and Zikr-se-Mir (Autobiography). Shaik Ghulam Hamdani Mushafi (1750-1824), Insha Allah Khan (Darya-e-Latafat and Rani Ketaki), Khwaja Haider Ali Atish, Daya Shankar Naseem (mathnavi: Gulzare-e-Naseem), Nawab Mirza Shauq (Bahr-e-Ishq, Zahr-e-Ishq and Lazzat-e-Ishq) and Shaik Imam Bakhsh Nasikh were the early poets in Urdu literature of Lucknow. Mir Babar Ali Anees (1802-1874) also had contributed to the fast escalating modern Urdu literature in India, excelling in the art of writing marsiyas.

The most illustrious poets in Urdu literature of the pre-modern period in India, were Muhammad Ibrahim Zauq (1789-1854) of Delhi and Nazmuddaulah Dabiru-i-Mulk. Modern period in Urdu literature spans the time from the last quarter of the 19th century, till the present day and can broadly be divided into two periods: the period of the Aligarh Movement started by Sir Sayyid Ahmad and the period influenced by Sir Muhammad Iqbal, followed by the Progressive movement and movements of Halqa-e-Arbab-e-Zouq, Modernism and Post modernism.

However, Altaf Husain Panipati (1837-1914), known as Hali or `the Modern One`, is the authentic trailblazer of the modern spirit in Urdu poetry. In the meantime, Hindu writers of the Urdu language also were not left far behind and among the earliest writers were Pandit Ratan Nath Sarshar (author of Fisana-e-Azad) and Brij Narain Chakbast (1882-1926). Prominent among the lot of Hindu Urdu writers are: Firaq Gorakhpuri, Pandit Ratan Nath Sarshar (Fasana-e-Azad) and Brij Narain Chakbast (1882 - 1926), who composed Subh-e-Watan and Tilok Chand Mahrum (1887-1966), who composed Andhi and Utra Hua Darya, Krishn Chander, Rajindar Singh Bedi, Kanhaiyalal Kapur, Upendar Nath Ashk, Jagan Nath Azad, Jogender Pal, Balraj Komal and Kumar Pashi. One of the most famous poets of modern Urdu is Sayyid Akbar Husain Razvi Allahabadi (1846-1921), who had possessed a flair for impromptu composition of satiric and comic verses. After 1936, Urdu literature picked up a progressive attitude and leaned more towards the problems of life.

Poetry, novels, short stories and essays were the basic avenues of liberal expression in Urdu literature of the modern period. The main exponents of this new line of approach were the short story writers, comprising Muhammad Husain Askari, Miranji, Faiz Ahmad `Faiz`, Sardar Ali Jafari and Khwajah Ahmad Abbas. Munshi Premchand, the greatest novelist of Hindi literature, had, for a time period, begun writing in Urdu and later switched to Hindi. Shibli Nomani (b.1857) is esteemed as the father of modern history in Urdu literature. He virtually had yielded several works based on historical research, especially on Islamic history, like Seerat-un-Noman (1892) and Al Faruq (1899). Shibli Nomani also had produced substantial works like Swanih Umari Moulana Rum, Ilmul Kalam (1903), Muvazina-e-Anis-o-Dabir (1907) and Sher-ul-Ajam (1899).

Short story in Urdu literature of the modern period began with Munshi Premchand`s Soz-e-Vatan (1908). His short stories comprehend almost a dozen volumes, comprising Prem Pachisi, Prem Battisi, Prem Chalisi, Zad-e-Rah, Vardaat, Akhri Tuhfa and Khak-e-Parvana. Mohammed Hussan Askari and Khwaja Ahmed Abbas are counted among the leading luminaries of the Urdu Short story. The Progressive Movement in Urdu fiction had picked up momentum under Sajjad Zaheer (1905-1976), Ahmed Ali (1912-1994), Mahmood-uz-Zafar (1908-1994) and Rasheed Jahan (1905-1952). Urdu literature authors like Rajender Singh Bedi and Krishn Chander (1914-1977) had exhibited out-and-out dedication to the Marxist philosophy in their writings. Krishn Chander`s Adhe Ghante Ka Khuda is one of the most unforgettable stories in Urdu literature of modern era. His other renowned short stories comprise Zindagi Ke Mor Par, Kalu Bhangi and Mahalaxmi Ka Pul. Rajender Singh Bedi`s Garm Kot and Lajvanti are enlisted amongst the chefs-d`oeuvre of Urdu short story. Manto, Ismat Chughtai and Mumtaz Mufti form an unlike sort of Urdu writers, who focused upon the "psychological story" as opposed to the "sociological story" of Bedi and Krishn Chander. Ahmad Nadeem Qasmi (b.1915) is one more foremost name in Urdu short story. His important short stories include Alhamd-o-Lillah, Savab, Nasib and others.

During the post-1936 period of modern Urdu literature, writers belonging to the Halqa-e-Arbab-e-Zauq dished out several good stories in the respective genre. Upender Nath Ashk (Dachi), Ghulam Abbas (Anandi), Intezar Hussain, Anwar Sajjad, Balraj Mainra, Surender Parkash and Qurratul-ain Haider (Sitaroun Se Aage, Mere Sanam Khane) are the other leaders of Urdu short story. Several stellar fiction writers emerged from the city of Hyderabad in the present times, comprising Jeelani Bano, Iqbal Mateen, Awaz Sayeed, Kadeer Zaman, Mazhr-uz-Zaman and others.

Novel writing in Urdu literature of the modern period can be traced to Nazir Ahmed, (1836 - 1912) who had penned several novels like Mirat-ul-Urus (1869), Banat-un-Nash (1873), Taubat-un-Nasuh (1877), Fasana-e-Mubtala (1885), Ibn-ul-Waqt (1888), Ayama (1891) and others. Pandit Ratan Nath Sarshar (1845 - 1903)`s Fasana-e-Azad, Abdul Halim Sharar (1860 - 1920)`s Badr-un-Nisa Ki Musibat and Agha Sadiq ki Shadi, Mirza Muhammed Hadi Ruswa`s Umrao Jan Ada (1899) are some of the stalwart instances of novels and novellas scripted during the period. However, it was Munshi Premchand (1880-1936) who had endeavoured to introduce the trend of realism in Urdu novel of contemporary era. Premchand was a prolific writer who virtually had left his mark in Urdu literature too, producing numerous books. His important novels include Bazare-e-Husn (1917), Gosha-e-Afiat, Chaugan-e-Hasti, Maidan-e-Amal and Godan. Premchand`s realism received additional boost by the writers of Indian Progressive Writers` Association, like Sajjad Zaheer, Krishn Chander and Ismat Chughtai. Krishn Chander`s Jab Khet Jage (1952), Ek Gadhe Ki Sarguzasht (1957) and Shikast are ranked amongst the stupendous novels in Urdu literature. Ismat Chughtai`s novel Terhi Lakir (1947) and Qurratul-ain Haider`s novel Aag Ka Darya are measured as cardinal works in the history of Urdu novel.

In spite of Urdu literature being considered a little tilted towards Islamic lines, there still existed some great Hindu writers who embraced Urdu like their very own, like Krishan Chandar, Rajindar Singh Bedi and Kanhaiyalal Kapur. Unfortunately, the lyrical language of Urdu of the modern period no longer savors the same position that it used to in the Mughal courts of its golden blooming period. However, Urdu literature is still encouraged in states like Jammu and Kashmir, Punjab and Hyderabad. Present day Standard Hindi borrows a lot from Urdu - in domains of grammar, diction and idiom.