Implicit in Freud's definition of transference neurosis is the valuable concept that evolution in the observable form of a patient's transference can be used as a criterion of analytic progress. Problems have arisen because the concept has been misapplied. Freud and those who followed him focused attention on clinical developments that are not in fact indicators that successful analytic work has taken place. It is suggested that transference neurosis be identified in terms of a different set of clinical observations than is usually used. Emphasis is given to evolution in the form of the analyst's activity, as well as the patient's, when analytic progress occurs. Validly applied, the concept of transference neurosis can provide a dependent variable whose appearance or non-appearance enables the testing of hypotheses about the psychoanalysis of neurotic patients.