This paper examines the ambiguity that attends Paul Klee’s characterization of the daemonic element in his work. It does so by analyzing the history of this concept in classical German thought from Wincklemann to Goethe. I note transformations of the concept in writings contemporaneous to Klee in literary theory and theology. These include Lukács, for whom the modern novel articulates the daemonic as an ironic world devoid of transcendental immanence, homeland, or essence; and Otto, for whom the world remained in some sense still not devoid of the numinous. I further consider these issues in brief discussion of Klee’s account of the polyphonic construction of the artwork. Finally, attention is given to proximate philosophical treatments of the topic in writers influenced by Klee’s work.