In this paper the authors use a psychoanalytic perspective to understand observations about the modes of self-deception that operate in physicians who have been dishonest or have engaged in other transgressions of ethics guidelines. They emphasize that it is inaccurate to categorize physicians as simply honest or dishonest, ethical or unethical. Physicians who have been ethical practitioners may rationalize sexual relations with patients, stealing from professional treasuries, lying, or other transgressions while convincing themselves that they have acted in an honourable manner. The authors share their experience of evaluating these phenomena in over 300 physicians who were referred to a specialized treatment centre by licensing boards, hospitals, physician health organizations or ethics committees. They note the high prevalence of defensive compartmentalization, temporal splitting and projective disavowal as means of tolerating behaviours they would generally regard as unethical. They also examine the implications of these modes of self-deception for psychotherapy.