A patient's psychotic decompensation during treatment is described in detail. The author points to a regression in ego functioning: in the affective sphere, "fragmentation" occurs, permitting various emotions to be expressed while defending against synthesis of a malignant delusional system. In the cognitive sphere, "dedifferentiation" is characterized by loss of the capacity to make distinctions. The patient's regression was touched off by an unconscious perception of the therapist's countertransference feelings, and some of the patient's symptoms caricatured what he believed the therapist to be expressing.