The unconscious is a central concept in psychoanalysis, and alaya-consciousness is a central concept in Buddhism. Although the unconscious is not a dominate concept in Western philosophy and psychology, there is a great deal of correspondence between the unconscious in psychoanalysis and alaya-consciousness in Buddhism. Psychoanalysis and Buddhism agree that the conscious is only a small part of the human mind, and that the vast majority of it is not the conscious. The compatibility of the unconscious in psychoanalysis and alaya-consciousness in Buddhism provides an important way to localise psychoanalysis in China. The Buddhist theory of alaya-consciousness is deeper and more systematic than the psychoanalytic theory of the unconscious, and this difference also provides the possibility of improving theory and technology of psychoanalysis from a Buddhist perspective. In addition, the integration of Buddhism and psychoanalysis is an important way to modernise Buddhism.