The author considers the effects on waking life of the night residue, which he defines as a psychological phenomenon derived from the return of repressed material occurring during sleep and which persists in some form into the waking state due to incomplete re-repression upon waking. Most often the night residue is a manifest dream; however, other night residues such as psychotic and conversion reactions, a belief in the prophetic nature of dreams, morning depression, sleep phobias, and rituals exist. These are briefly described. The night residue has adaptive and individual significance.