Youth Novels received generally positive reviews from music critics. At Metacritic, which assigns a weighted mean rating out of 100 to reviews from mainstream critics, the album received an average score of 75, based on 27 reviews, which indicates "generally favorable reviews". Alex Denney of Drowned in Sound praised the album as "a twinkle-toed debut that dares to suggest what others can only make tediously plain, and leaves us in the rarely-enjoyed position of actually wanting more."PopMatters's Adrien Begrand called it "extraordinary" and described it as "a surprisingly stark-sounding album, an enticing blend of Robyn's unpretentious dance-pop and El Perro del Mar's introspection and tenderness."The Times critic Tom Gatti noted that Yttling gave Youth Novels the same treatment as to Peter Bjorn and John's song "Young Folks", stating that he "[weaves] Lykke Li's girlish, wistful songs of young love and loss into bright pocket symphonies."
In a review for The A.V. Club, Vadim Rizov characterised Youth Novels as "all teasing and heartbreak, with production [...] that plays on empty spaces as much as well-chosen backing", commending Li for "adeptly [straddling] the line between instant gratification and minimalist smarts." Killian Fox of The Observer commented that "[t]he coquettish charm of [Li's] voice, tinged with shyness, is brilliantly offset by Björn Yttling's skeletal productions, which create great pop momentum out of the slightest effects", concluding, "The lyrics lack focus at times but this is a winning debut." Greg Cochrane of the NME called the album "[s]imple but sensational". K. Ross Hoffman of AllMusic wrote, "Brimming with ideas but understated, even tentative in executing them, and big on hooks but nervously intimate in presentation, Youth Novels is a curious, decidedly unorthodox but endearing record."
Joe Gross of Spin stated that "[Li's] voice is mousy, the low end juicy, the melodies sketchy, the choruses huge", but found that "[s]he should lose the spoken-word bits, though; they don't even work for her goddess Madonna." Tom Ewing of Pitchfork expressed, "At its frequent best, the record manages to sketch out widescreen hit songs with a remarkable economy of means. At its more occasional worst, the tracks feel frustratingly underthought." Will Hermes of Rolling Stone felt that Li's "frosty squeak is a limited instrument, but she works it, mixing adorable playground scats with spoken-word whispers and parched coos that barely sketch her sugary melodies. The arrangements also dress simple tunes in surprising ways, with odd choral bits and percolating percussion webs that should tease movement from even reluctant hips."The Guardian's Maddy Costa opined that the song "Tonight" "shows what she is capable of: underscored by a melancholy piano, she is darkly seductive", but "[a]fter that has passed, the album just gets increasingly cloying."
Youth Novels earned Li five nominations for the 2009 Swedish Grammis, including Album of the Year, Female Artist of the Year, Live Act of the Year, Composer of the Year (with Yttling) and Lyricist of the Year. The same year, she won the P3 Guld award for Newcomer of the Year and was nominated for Pop Artist of the Year.
In continental Europe, Youth Novels reached number 36 in Norway, number 56 in Belgium, number 75 in the Netherlands and number 143 in France. It also peaked at number 18 on Billboard's Top Heatseekers in the United States, and at number seven on the ARIA Hitseekers chart in Australia. As of April 2014, the album had sold 106,000 copies in the United States.