‘’The Hag-Seed’’ (2016) is a postmodern interpretation of Shakespeare’s last play ‘’The Tempest’ by a famous contemporary Canadian writer Margaret Atwood.Prospero, the protagonist of Shakespeare’s ‘The Tempest’ is represented by a 21st century theatre director Felix Philips, who twelve years after being removed from the theatre by his trusted colleague, gets a job teaching Literacy in the Fletcher County Correctional Institution and directs Shakespeare’s ‘The Tempest’ which is performed by the prisoners. Thus, Atwood’s novel is a story about a man who directs a play about a man (Prospero) who in his turn is the director of everything what happens in ‘The Tempest’Atwood’s novel is a multilayered text which has Shakespeare’s play as an intertext. The article focuses on the analysis of the interpretation that Shakespeare’s text gains in Atwood’s novel. (characters, plot structure, etc.). Particular attention is paid to the analysis of the novel’s form, namely what specific transformation the poetics of the text undergoes due to its transfer from one genre to another. The paper also studies the function of the hyper-textuality, and the play in a play device. The analysis reveals that the novel treats arts as the best means of creating the illusory and hyperreality and simulacra which is generally characteristic to postmodern poetics. One of the characteristics of the novel is dialogism and heteroglossia which is achieved not only by the fact that the text is in constant dialogue with Shakespeare’s ‘The Tempest’, but also by introducing multiple voices offering equally important, interesting and in most cases contradictory interpretations which create a variety of ending choices.