The psychoanalytic tradition of direct observation of children has a long history, going back to the early 20th century, when psychoanalysis and the emerging field of ‘child studies’ came into fruitful contact in Freud's Vienna. As a leading figure in the attempted integration of direct observation with the new psychoanalytic knowledge emerging from the consulting room, Anna Freud played a crucial role in the emergence of this field. But her major contribution to the theory and practice of observing children came during the Second World War, when she founded the Hampstead War Nurseries. The author describes in detail this important period of Anna Freud's career, and discusses the impact it had on later work. He explores the theoretical contribution that Anna Freud made in the post-war years to the debate about the place of direct observation in psychoanalysis, and concludes that Anna Freud's ‘double approach’ (direct observation plus analytic reconstruction) still has a great deal to offer as a method of both psychoanalytic research and education.