The paper confronts psychoanalytic dream theories with the findings of empirical dream research. It summarizes the discussion in psychoanalysis around the function of dreams (e.g. as the guardian of sleep), wish-fullfilment or compensation, whether there is a difference between latent and manifest content, etc. In empirical dream research some of these questions have been investigated and the results can provide clarifications for psychoanalytic theorizing. The paper provides an overview of empirical dream research and its findings, as well as of clinical dream research in psychoanalysis, which was mainly conducted in German-speaking countries. The results are used to discuss the major questions in psychoanalytic dream theories and points out some developments in contemporary approaches which have been influenced by these insights. As a conclusion the paper attempts to formulate a revised theory of dreaming and its functions, which combines psychoanalytic thinking with research.