Xenophobia is the fear of foreigners. This word is not interchangeable with racism and its manifestations can have enduring ramifications. Although various schools of psychoanalytic thought, including Freudian, Jungian, and Kleinian, have offered explanations for xenophobia, none explain the endopsychic structural changes in the individual during the manifestations of xenophobic behaviors. Fairbairn’s multilayered theory has attracted more attention over the past decades in clinical and non-clinical settings. In this paper, this theory is used to explain the structural alterations that occur as an individual shows xenophobic behavior or manifests a propensity for demagoguery. Furthermore, Fairbairn’s theory of endopsychic structure is used to show what discourses could provoke these dynamics. Finally, there is a suggestion for creating an atmosphere conducive to a more stable psyche for the next generation.