The first half of this paper attempts to track and to elaborate Freud's thesis on the mechanism proper to psychosis with particular attention paid to the case of Schreber. It is written emphasizing that Freud was only at the initial stages of his work on the function of the father and that this led to the stumbling blocks he encountered and left him dissatisfied with his work. The second half of the paper looks at the way in which Jacques Lacan took up Freud's work. It looks at how he used it to understand the structure of psychosis in a new way, giving the specific problems that arise in psychosis a central place in the practice of psychoanalysis.