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The subjective experience in the early phases of psychosis is studied with vignettes presented from clinical work as well as literary accounts. Patients describe an altered self and world awareness; perceptual modes are heightened and an experience of breakthrough or release is reported. This is often accompanied by a vague but progressive sense of dread. The early psychotic experience is similar to the states produced by LSD and Mescaline in that a 'multi-potential state' exists and multiple factors influence the outcome. The authors emphasize that 'psychedelic and psychotomimetic phenomena are closely related'. Intense mystical or religious experiences as described by William James also have strikingly similar elements in common with the early psychotic and LSD experience. Thus these altered states of self and world awareness can occur in different contexts. The outcome seems to depend on the viability of various ego functions as well as environmental factors. It is stressed that a firmer delineation of the ego assets and liabilities in such states could help clarify important psychological phenomena.