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As part of a series of articles addressing unresolved conceptual and empirical questions regarding structural diagnosis and the borderline concept, this study examines differences in the representation of interpersonal boundaries among neurotic, borderline, and schizophrenic patients. Drawing on the contributions of Blatt and his colleagues, a Boundary Disturbance Scale was constructed by applying a developmental continuum of boundary representation to a traditional ego psychological analysis of thought disorder on the Rorschach. The results of the study support the hypothesis that severe borderline psychopathology can be conceptualized as a failure to maintain the inner–outer boundary, that schizophrenia involves a deficit in maintaining the distinction between self and others, and that meaningful developmental distinctions between diagnostic groups can be made on the basis of the Rorschach. The findings demonstrate the broad explanatory scope gained by a developmental object relations model in clarifying perplexing diagnostic and conceptual issues involving borderline phenomena on the Rorschach, specifically, (1) the representation of boundaries, (2) the cognitive disturbance involving the inner–outer boundary, and (3) the nature of the short–lived, circumscribed psychotic episodes in these patients.