This chapter describes an important segment of the spiritual-literary activity of the Sages in the Land of Israel in the period beginning with the completion of the Mishnah in c. 200 CE and ending with the conquest of the Middle East by the Muslims. The question of where the aggadic literature, the targum and the piyyut, were created involves geographical and social-institutional issues. Two principal institutions, the synagogue and the house of study, influenced the Sitz im Leben of the aggadic, targumic, and poetic creativity in the Land of Israel. In the synagogue, Jews gathered in order to study Scripture, to pray, and to listen to sermons. The piyyut and the targum were created and flourished first of all in the synagogue, while aggadah existed both there and in the house of study. The great freedom exhibited by the Rabbis in their midrashic activity produced countless aggadic traditions resembling a giant upside-down pyramid with a small apex, the Bible.