His ideas for The Life of a Great Sinner were sketched in his notebooks between December 1869 and January 1870, and Dostoevsky told Apollon Maikov in the first week of December that he would be sitting down to begin writing 'in three days'. But just a month later, he excitedly reported to Maikov that he had been inspired by a new theme. 'I have tackled a rich idea,' he tells him enthusiastically. 'I am not speaking of the execution but of the idea. One of the ideas that has an undoubted resonance among the public. Like Crime and Punishment but even closer to reality, more vital, and having direct relevance for the most important contemporary issue.' Dostoevsky was certain that he would be able to finish this novel by the fall of 1870, and that, since its topicality might have the same financial success as Crime and Punishment, 'there is hope of putting all my affairs in order and of returning to Russia ... Never have I worked with such enjoyment and such ease.'

This is the first reference to Demons in Dostoevsky's correspondence, and we can see the novel beginning to take shape in his notebooks while, at the same time, he continued to add material to his 'great sinner' corpus (some notes are dated from as late as March 1870). But what was the idea that had so gripped Dostoevsky, and which had 'direct relevance to the most important contemporary issue'? It was the murder, committed during November 1869, of a young student at the Petrovsky Agricultural Academy in Moscow by a revolutionary group headed by Sergei Nechaev; and one can see why Dostoevsky thought that his proposed idea was 'even closer to reality' than Crime and Punishment. In that novel, he had invented a crime inspired by the supposedly humanitarian aims of radical ideology, but now 'reality' had finally caught up with what he had foreseen would be the results of 'rational egoism' in practice.

News about the crime began to appear in the Russian and foreign press about a month after it was committed, and while it certainly would have attracted Dostoevsky's notice in any case, the name and activities of Nechaev had come to his attention even earlier. It so happened that Dostoevsky's young brother-in-law, Ivan Snitkin, was a student in this very Academy and had been visiting with the Dostoevskys in the fall of 1869. Dostoevsky's wife, Anna Grigoryevna, thus attributed the origin of the novel to Dostoevsky's conversations with her young brother; but this exhibition of pardonable family pride is highly exaggerated. At most, Ivan Snitkin may have spoken to Dostoevsky about Nechaev's organizing activites at his school before the murder actually took place, but he could have known nothing else; nor is there any evidence in Dostoevsky's notes that he thought of a novel involving a political murder before the story broke in the newspapers. Indeed, Dostoevsky himself affirmed, in a letter to his editor Mikhail Katkov a year later, that 'I know nothing at all about Nechaev, nor Ivanov [the victim], nor the circumstances of the murder, except from the newspapers.'

What Dostoevsky learned from these newspapers confirmed some of his worst fears, which had become particularly exacerbated during his self-imposed European exile, about the disintegrating effect that the Western-imported ideas of the Russian Nihilism of the 1860s was exercising on the moral fibre of Russian society. Sergei Nechaev, whose extraordinary force of personality seemed to exercise a hypnotic effect on all those who knew him, had carried the Utilitarian component of 'rational egoism' to its farthest extreme by advocating a total Machiavellianism — one which included, not only deception and falsity against one's enemies, but also against friends and allies if this became necessary for the cause. In his own case, Nechaev created a completely false myth about himself as having been arrested, and then accomplishing the unprecedented feat of escaping from the Peter-and-Paul fortress (where Dostoevsky himself had once been imprisoned). When Nechaev contacted the veteran revolutionaries Mikhail Bakunin and Nikolai Ogarev in Geneva, enveloped in the aureole of his supposed exploits, he represented himself as the delegate of a powerful and perfectly fictitious underground organization; and Pyotr Verkhovensky presents himself in the same fashion to the awed members of his revolutionary cell, as well as to all those assembled in the superb scene in which 'the progressives' of the town gather for a meeting. Dostoevsky read Nechaev's blood-curdling Catechism of a Revolutionary (probably written in collaboration with Bakunin), only after the first part of Demons had already appeared. But he was convinced that he had nonetheless created a character, Pyotr Verkhovensky, who embodied all the unscrupulousness and ruthlessness of its precepts, and the Catechism itself, though perhaps adding a few extra details, only helped to confirm his creation. Pyotr Verkhovensky, he told Katkov, does not resemble the real-life Nechaev in any way, but 'my aroused mind has created by imagination the person, the type, that really corresponds to the crime'. The image of this type, however, did not emerge all at once, but underwent a crucial metamorphosis as the writing of the book proceeded.

Pyotr Verkhovensky is a product of the ideology of the 1860s, and the members of this generation, almost from the very start, had defined themselves in opposition to the generation of the 1840s (to which Dostoevsky himself belonged). This conflict of generations had been brilliantly depicted in Turgenev's Fathers and Children, a novel that Dostoevsky greatly admired, and in which the main younger character, a medical student named Bazarov, treated members of the older generation with a pitying and condescending contempt. He had no tolerance at all for their high-minded Romantic and idealistic velleities, even though these had played a part in helping to abolish serfdom and had led to a more humanitarian attitude toward the peasantry. But Bazarov had no patience with exalted sentiment of any kind, including that expressed in art, and proclaimed himself a Nihilist who believed nothing except what could be established through science and materialism (he spends a good part of his time dissecting frogs).

This opposition between the generations, so indelibly portrayed by Turgenev, also gave rise to a whole series of polemical exchanges throughout the mid-1860s to which Dostoevsky paid the closest attention, and on which he drew for his own novel. In 1867, he quarrelled personally with Turgenev, at least in part because of an anti-Russian tirade in Turgenev's novel, Smoke; and in the course of their heated exchange of unpleasantries, he advised his fellow novelist to acquire a telescope so that he could see Russia more clearly from the latter's European residence. In reporting on this incident to Maikov, Dostoevsky already anticipates the clash of generations as he would later present it. 'The difference [between the generations]' he wrote, 'is that Chernyshevsky's followers simply criticize Russia openly and wish for its collapse,' while the older radicals of the 1840s like Turgenev, who are 'Belinsky's offspring, [Belinsky was the greatest literary critic of the 1840s, a political radical and Westernizer] add that they love Russia.' (italics in text) The tragi-comic quarrel between Pyotr and his father, the marvellously delineated Stepan Trofimovich, whom Dostoevsky both pillories and glorifies at the same time, is already implicit in these words.

Once having decided to write a topical novel, Dostoevsky started by reworking some of his old notes in which embryonic images of his later characters already appear. There is a Romantic poet who calls himself 'a pagan' and 'deifies nature' (Stepan Trofimovich); there is a lame girl, whose father is a drunken lieutenant, and 'who goes begging in a noble fashion' (Captain Lebyadkin and his lame sister Marya); there is also the beginning of a political plot. 'Nechaev, Kulishov had denounced Nechaev ... The police enter and capture [presumably Nechaev].' Dostoevsky also sketches a romantic rivalry between a Prince, 'a pathetic figure', and a Schoolteacher, obviously a moral exemplar; both are competing for the affections of a young girl called the Ward (Darya Shatov), who has been raised by the Prince's mother (Mme Stavrogin).When the Prince seduces the Ward, the mother wants to marry her off to the Schoolteacher with a dowry; but he refuses the dowry and becomes her friend instead. This plot intrigue, provisonally entitled Envy, ends with the Prince marrying the Ward because he wishes to emulate the superior moral qualities of the Teacher.