In this paper, the author presents the method of psychoanalytic observation of institutions. He links this method to the clinical practice of psychoanalysis as well as to infant observation. After discussing the theoretical concepts underpinning the observational method, he describes the method itself and throughout gives illustrations from institutional observations. While psychoanalytic observation of institutions is, first of all, a method of training for psychiatrists and more recently for institutional consultants and social scientists, he argues that institutional observation can also be used as a research method, for single case studies, as well as for wider studies.