Closely related to myth are legend and folktale. Myths, legends, and folktales are different types of traditional story.^[16] Unlike myths, folktales can be set in any time and any place, and they are not considered true or sacred by the societies that tell them.^[9] Like myths, legends are stories that are traditionally considered true, but are set in a more recent time, when the world was much as it is today.^[9] Legends generally feature humans as their main characters, whereas myths generally focus on superhuman characters.^[9]

The distinction between myth, legend, and folktale is meant simply as a useful tool for grouping traditional stories.^[17] In many cultures, it is hard to draw a sharp line between myths and legends.^[18] Instead of dividing their traditional stories into myths, legends, and folktales, some cultures divide them into two categories, one that roughly corresponds to folktales, and one that combines myths and legends.^[19] Even myths and folktales are not completely distinct. A story may be considered true (and therefore a myth) in one society, but considered fictional (and therefore a folktale) in another society.^[20][21] In fact, when a myth loses its status as part of a religious system, it often takes on traits more typical of folktales, with its formerly divine characters reinterpreted as human heroes, giants, or fairies.^[10]

Myth, legend, and folktale are only a few of the categories of traditional stories. Other categories include anecdotes and some kinds of jokes.^[17] Traditional stories, in turn, are only one category within folklore, which also includes items such as gestures, costumes, and music.^[21]