This article traces the evolution of the concept of unconscious fantasy from its origins in Freud's early clinical writings to its place in the theory and practice of modern conflict theory. The central role played by Arlow's clarification of the ubiquitous influence of unconscious fantasy life on aspects of normal mental functioning such as perception, memory, thinking, and reality testing is highlighted. Some contemporary clinical applications of our understanding of unconscious fantasies are added to the long familiar awareness of its role in symptom formation.