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The paper focuses on the articulation of two areas of theory: that of development of the self through fragmentation and differentiation and that of narcissism in early psychological development, and its pathology later in life. Jungian ideas concerning the self and individuation (including those developed by Fordham) are linked with psychoanalytic ideas, notably Kohut's, and related to the concepts of narcissism and ego-development. In this the focus is on a revaluation of the negative overtones of ‘fragmentation’ and ‘narcissism’ and an indication of their place in the process of individuation. It is pointed out that a varying emphasis in the analyst on what are called the biological and ethological aspects of these theories will have important implications for the treatment of patients. The theoretical position is illustrated by a lengthy clinical example involving a case of early injury to the self which suggests the pathology of narcissistic character disorder. But the case also illustrates the contribution to development of fragmentation and narcissism, which are revalued here as the ‘part-for-the-whole’ and as one of the ‘motors’ of individuation. Working within a perspective that prioritizes the importance of the drive towards relationship, it is recommended that the analyst learns to respect and value phenomenologically the contribution of fragmentation and narcissism to normal development, if true healing is to occur.