Since the late nineteenth century, Western intellectuals have tended to depict ‘modernity’ as being incompatible with ‘enchantment’. Thus Max Weber argued that two aspects intrinsic to modernity, rationalization and bureaucratization, were inimical to the magical attitudes toward human existence that characterized medieval and early modern thought. His gloomy image of the ‘iron cage’ of reason echoed the fears of earlier romantics and was to be repeated by later cultural pessimists through the twentieth century. This article recovers a different outlook that emerged during the fin-de-siècle, one that reconciled the rational and secular tenets of modernity with enchantment and that underlies many forms of contemporary cultural practice. The popularity of Sir Arthur Conan Doyle's Sherlock Holmes is taken as an exemplary instance of a specifically modern form of enchantment. First, Holmes's own form of rationalism, ‘animistic reason’, offered an alternative to the narrower instrumental reason that cultural pessimists claimed as a defining element of modernity. Second, many adult readers at the turn of the century and beyond were able to pretend that Holmes was real, and his creator fictitious, through the ‘ironic imagination’, a more capacious and playful understanding of the imagination than that held by the early Victorians. Both animistic reason and the ironic imagination made Holmes an iconic figure who enacted and represented the reconciliation of modernity and enchantment, whereas Doyle, unable to accept this reconciliation, resorted to spiritualism, a holdover of ‘premodern’ enchantment.