This article analyzes the psychopolitical dynamics of the bystander phenomenon in the context of Argentine state terror. It explores the population's adaptation to the military's Official Story through psychological defences that resulted in losses of individual and group identity. It depicts the factors that potentiate disengagement from a coercive power and its culture of fear. These themes are examined in Luis Puenzo's 1985 Academy-award winning film, The Official Story, whose story portrays the psychological and ideological characteristics of the bystander and the capacity of the subject to emerge from self-deception to tolerate the complex truths of psychic and social reality.