Some cases of confabulation or false memories following prefrontal brain damage seem to represent a shift from “reality principle” to “pleasure principle” thinking. Such a shift presents a unique challenge to psychotherapists, who find that their experienced reality and the patient's are considerably at odds. This paper presents a patient with orbitofrontal damage, whose transference in therapy was based on false memories of mutual past experiences with the therapist. Throughout the process of “experience-near” psychotherapeutic work with the patient, the content of confabulations gradually changed, indicating changes in transference relations and progress in therapy. Following the presentation of the clinical material, an integration of psychoanalytic and neuroscientific understanding of the case is suggested. Finally, neuropsychodynamic insights into the process of creating a confabulation, and into the nature of transference, are suggested, based on examples from the case material.