Southern Gothic, Comedy
O'Connor's fiction is often called "Southern Gothic," though she herself rejected that label. many of the elements of "gothic" fiction, or plain old horror, but with a distinctively Southern vibe. There's a looming sense of darkness, suspense, and foreboding about the story, which is established right at the beginning when the grandmother reads about The Misfit in the newspaper. Just to make sure we don't forget about the element of horror, The Misfit is also mentioned at Red Sammy's. It's even suggested The Misfit might come to that very place. The scenery – the dirt road in the middle of nowhere that's supposed to lead to an old plantation house, the looming forests, the family trapped alone in a ditch – could also be right out of a horror movie.
Let's not forget The Misfit himself, who is a terrifying killer without a conscience. Though we do see what may be the beginnings of a moral transformation at the end of the story. Finally, although there's not anything obviously "supernatural" in the story (a common but not required element of gothic fiction), there is that potentially supernatural moment of grace. Plus, the whole sequence of events – ending up in exactly the wrong place because of misplaced memory and a disturbed cat – just feels too convenient for the story to ever actually happen. That lends it a slightly fantastic or unreal aura.
O'Connor rejected the label "Southern Gothic" for the same reasons she rejected the idea that her writing was "grotesque" (See "Writing Style" for more on this). She associated Southern Gothic (which was a label commonly associated with William Faulkner's work, and the works inspired by it) with fiction that depicted human "degeneracy" in the South, in such a way that it would strike readers almost like a horror story would and at times have an air of something supernaturally dark. Because of O'Connor's religious perspective, she always emphasized that her work was interested more in the light that could come through in moments of darkness, and was meant to inspire hope and meditation rather than horror or disgust. That's why she preferred the term "Catholic realism" to describe its genre (source: The Habit of Being).