Philip Pullman has repeatedly drawn attention to his commitment to ‘realism’ in the writing of his trilogy His Dark Materials. In this paper, which considers Volume 1, and which will be followed by papers on the succeeding volumes, we explore the meaning of this in the domain of psychic reality. We argue that Pullman writes in the tradition of children's literature which explores children's emotional development. His heroine, Lyra, embarks on a journey which involves learning to differentiate between untrustworthy and dependable parental figures. The magical features of the story allow for fluidity in exploring unconscious phantasy and dreamworlds. The ‘fantasy’ genre of the story allows its author at the same time to explore many aspects of the contemporary world and its problems, and thus offers its readers an experience of intellectual as well as emotional adventure.