The Faust of early books—as well as the ballads, dramas and puppet-plays which grew out of them—is irrevocably damned because he prefers human to divine knowledge; "he laid the Holy Scriptures behind the door and under the bench, refused to be called doctor of Theology, but preferred to be styled doctor of Medicine."

Plays and comic puppet theatre loosely based on this legend were popular throughout Germany in the 16th century, often reducing Faust to a figure of vulgar fun. The story was popularized in England by Christopher Marlowe, who gave it a classic treatment in his play, The Tragical History of Doctor Faustus. In Goethe's reworking of the story 200 years later, Faust becomes a dissatisfied intellectual who yearns for "more than earthly meat and drink".[citation needed]

Despite his scholarly eminence, Faust is bored and disappointed. He decides to call on the Devil for further knowledge and magic powers with which to indulge all the pleasures of the world. In response, the Devil's representative Mephistopheles appears. He makes a bargain with Faust: Mephistopheles will serve Faust with his magic powers for a term of years, but at the end of the term, the Devil will claim Faust's soul and Faust will be eternally damned.

During the term, Faust makes use of Mephistopheles in various ways. In many versions of the story, Mephistopheles helps him to seduce a beautiful and innocent girl, usually named Gretchen, who is destroyed. However, Gretchen's naive innocence saves her in the end and she enters Heaven. However, Faust is irrevocably corrupted; when the term ends, the Devil carries him off to Hell.

The first printed source on the legend of Faust is a little chapbook bearing the title Historia von D. Johann Fausten, published in 1587. The book was re-edited and borrowed from throughout the 16th century. Other "Faustbooks" of that era include:

The 1725 Faustbook was widely circulated, and also read by the young Goethe.

The origin of Faust's name and persona remains unclear; though it is widely assumed to be based on the figure of Dr. Johann Georg Faust (c. 1480–1540), a magician and alchemist probably from Knittlingen, Württemberg, who obtained a degree in divinity from Heidelberg University in 1509, scholars such as Frank Baron and Dr. Leo Ruickbie contest many of these previous assumptions.

Some sources also connect the legendary Faust with Johann Fust (c. 1400–1466), Johann Gutenberg's business partner, or suggest that Fust is one of the multiple origins to the Faust story.

The character in Polish folklore named Pan Twardowski presents similarities with Faust, and this legend seems to have originated at roughly the same time. It is unclear whether the two tales have a common origin or influenced each other. Pan Twardowski may be based on a 16th-century German emigrant to the then-capital of Poland, Kraków, or possibly John Dee or Edward Kelley. According to the theologian Philip Melanchthon, the historic Johann Faust had studied in Kraków, as well.

Related tales about a pact between man and the Devil include the legend of Theophilus of Adana, the 5th-century bishop; and the plays Mary of Nijmegen (Dutch, early 15th century, attributed to Anna Bijns) and Cenodoxus (German, early 17th century, by Jacob Bidermann).