It is generally believed that a treatment that is more effective than its alternatives will be used, but psychological treatments for schizophrenic and other psychotic reactions have been avoided despite the evidence for their effectiveness from the time of “moral treatment” to the present. Less effective (or even destructive) treatments have been seized upon, in part because they do not require understanding these patients. Understanding schizophrenic persons means facing facts about ourselves, our families, and our society that we do not want to know, or to know again (in the case of repressed feelings and experiences). The central role of terror in producing symptoms, and the genesis and psychological handling of symptoms, including delusions and hallucinations, are briefly described.