This study argues that material and intellectual exchanges between indigenous people and Euro-Americans shaped American literature throughout the eighteenth and nineteenth centuries. Therefore, one cannot analyze literary texts about Indians without attention to Native communities, knowledge traditions, and written and oral forms. Literary critics have emphasized white authors' stereotypical representations of Indians and have traced a separate Native American literary tradition focused on political engagements. Although this framework importantly reveals that colonial power dynamics influenced literary texts, it obscures a composite literary tradition in which Native people were not simply passive or resistant but actively participated in and shaped the representational modes that characterize American literature. During the eighteenth century, Anglo-Americans in the Southeast and Northeast relied on Native mapping, record-keeping, communications, and political alliances as they attempted to settle the land and represent the various communities that inhabited it. Writings by William Byrd II, Eleazar Wheelock, and Samson Occom (Mohegan) demonstrate that Native kinship networks, tribal histories, ceremonial diplomacy, and knowledge of the land influenced settlement literature as much as drawing boundary lines, cataloguing flora and fauna, and spreading Christianity. During the nineteenth century, U.S. nationhood did not end Indians' impact on textual forms, despite the U.S.'s systematic attempts to annihilate Indians physically and discursively so as to gain access to their land. I trace in the writings of Lydia Sigourney, Washington Irving, Mark Twain, Charles Alexander Eastman (Dakota Sioux), and Stephen Crane tensions between localized, fact-based depictions of Indians and the mass-produced sensational and romantic literary figures that served settler colonialism. These tensions, I argue, generated new representational interests and shifted the grounds of American literary forms. Considering Indian nations as central to the development of American literature, American Indians and the Grounds of American Literary History demonstrates that transnational studies need not mean transatlantic or hemispheric, for local exchanges and contests between Natives and non-Natives both contributed to and unsettled national identity.