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Esther Bick introduced psychoanalytic infant observation courses at the Tavistock Clinic in London in 1948 as part of the training for child psychotherapists in order to facilitate clinical training. She thought that being able to observe infantile processes as they developed was a good grounding for psychoanalytic practice, and noted that it was helpful for mothers to have someone visiting who could admire and appreciate their baby. Since then, there has been considerable writing and some research about the value of infant observation to trainee psychotherapists (Sternberg, 2005), but relatively little has been written about the effect of being observed in this way. Watillon-Naveau (2008) wrote about the families she visited after they had been observed; Bekos (2006) did an MA study of three observed mothers. Both concluded that it was an important experience for the observed. This paper endeavours to understand more about what exactly can be perceived in the interrelated and intersubjective communication and feedback loops between the infant, their primary carers and the observer. The author argues for the theoretical possibility of healthy narcissism and for projective identification being a reactive process. The paper considers what learning from infant observation can offer psychoanalytic theory and what clinical implications could be drawn.