Psychoanalysis was the dominant paradigm for understanding personality in the first half of the twentieth century. It was particularly powerful and long-lasting in the United States, at least in part because of the exodus of German and Austrian psychoanalysts from Europe before and during World War II. Psychoanalysis got its start in Vienna in the 1890s in the work of Sigmund Freud, a neurologist who treated numerous patients with "hysteria," a collection of somatic symptoms (such as paralysis, motor automatisms, blindness or deafness, etc.) that appeared to have no physiological basis. In the next section, we will describe the theory that Freud arrived at after many years of refining and defending his original conclusions; in this section, we describe some of Freud's basic assumptions, and the methods he used to follow them up.

Freud made three basic assumptions about the nature of human behavior: 1) he believed that behavior was driven by basic instincts toward sex and death; 2) he believed that behavior was determined by unconscious forces, and that conscious deliberation was usually more of an excuse for such forces than a force in and of itself; 3) he believed that early life events before the age of five set the pattern for behavior throughout the entire life span.

Freud began his investigations by using a clinical interview. However, he rather quickly decided that the most important causes of human behavior were often not accessible to conscious awareness. Therefore, he concluded, clinical interviews were unlikely to provide the information necessary to determine why a particular person was mentally ill, or why they had the particular kinds of personality problems they had. Freud turned to several other techniques that he hoped would allow him to peek into the patient's unconscious. The first of these was free association, in which a patient would be asked to rattle off as many successive words associations as possible, with no censorship. Freud believed that, without the pressures of censorship and directed thought, the unconscious forces that directed behavior would reveal themselves in the particular associations that a person provided to a word. Another technique Freud used was dream interpretation. According to Freud, when we dream we are less likely to repress or ignore our unconscious wishes, so the contents of dreams can provide a guide to the unconscious.