“The Development of Trauma Theory in Psychoanalysis” traces Freud's early hypotheses on trauma and seduction theory before moving on to a description of Ferenczi's innovative approach, followed by a review of relevant findings from research on infancy, as well as recent ideas gleaned in connection with insights on seduction in childhood—not least in the treatment of Holocaust survivors and their descendants. The treatment of Holocaust survivors made it necessary to reconceptualize trauma theory to encompass this extremely traumatic experience. The author demonstrates that in psychoanalytic thinking, different theories of trauma have developed on the basis of two different models: one psychoeconomic, and the other centered on the theory of object relations. Both models are essential to any balanced understanding of trauma.