This paper discusses the main findings of a prospective study based at the Cassel Hospital, a centre dedicated to the psychoanalytically informed residential treatment of severe personality disorders. The results—showing that significantly greater improvements on a number of outcome indicators were found in patients exposed to the psychoanalytically informed treatment programmes compared to a general psychiatric approach based on management and pharmacotherapy alone—underscores the importance and the centrality of the psychoanalytic input in the treatment of severe personality disorders. However, the results of the study also suggested that some features of long-term hospital treatment might carry the risk of iatrogenic and anti-therapeutic effects for a sub-group of patients with severe borderline core pathology. The authors present the clinical and psychodynamic implications of the study results based on an understanding of the internal and interpersonalmode of functioning of borderline patients.