Four principles are identified that account for most delusion formation. The most important of these is transference—transference to the world at large. The second is the defense against pseudohomosexual impulses as described by Freud (and generally misunderstood). The third is the learning within the family of bizarre meanings of concepts which are assumed erroneously to be the meanings other people use. The fourth is the need to have a more or less consistent understanding of one's life and experiences. Therapeutic implications are drawn.