The idea for Ship of Fools (Little, Brown and Company, 1962) originated in a voyage that Katherine Anne Porter took from Mexico to Europe in 1931. Some of the passengers she encountered on the ship became the models for the characters in Ship of Fools. Porter began work on the novel in 1941 and it took her twenty years to complete.

The title is taken from a moral allegory published in Latin in the fifteenth century. Porter wrote that the title of her novel symbolizes "the ship of this world on its voyage to eternity." The wide cast of characters includes German, Swiss, Spanish, Cuban, Mexican, Swedish, and American firstclass travelers. In steerage, there are 876 Spanish workers who are being deported from the sugar fields of Cuba.

Ship of Fools is notable for its pessimistic view of the human condition. In particular, the Germans are portrayed in a harshly negative light. They are mostly anti-Semitic and contemptuous of races other than their own, with an arrogant sense of their own superiority. Critics have remarked on how accurately Porter conveyed the German mentality on the eve of the rise of Nazism. However, the other characters, with few exceptions, are unsavory also. The one Jew on the ship is filled with hatred for all Gentiles; the Spanish, who are members of a dancing troupe, are presented as amoral thieves, pimps and prostitutes. There is little genuine human love present in the novel, although there is much comedy and satire.

Ship of Fools is the only novel Porter wrote. It was an immediate bestseller and was made into a movie in 1965. Critical judgment, however, was sharply divided over the merits of the novel, a debate that continues today.