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Like other creative industries emerging in mid-1945 from 12 years of Nazi rule, including six years of war, German publishing was ideologically suspect, internationally isolated, and insular. By the 1950s, however, the book trade in the two German successor states was once again varied and vibrant. And it was also tightly integrated into the international publishing business, within which it had become an increasingly active and important presence. This article analyzes the development of the German book publishing industry during the Allied occupation, 1945-1949, through the lens of knowledge transfer. It was a time during which capital-starved German publishers harnessed the political and ideological objectives of the occupiers and their prewar contacts to achieve their own commercial and cultural ambitions, including taking initial steps toward internationalization. The focus is on literary fiction, a genre that constituted a minority of all published output in the postwar period, but which also included all top bestsellers. Literature in translation, moreover, accounted for a substantial proportion of those bestselling books, and at the same time represented a key vehicle for internationalization. Two case studies, one drawn from the Soviet zone of occupation, the later East Germany, and one from the western zones that came to be dominated by the Americans, the later West Germany, illustrate two different, yet remarkably similar paths through which this interplay of ideological alignment and commerce played out among a range of actors and laid the basis for the subsequent development of the industry.