In this article I contend that Freud discovered transference in connection with material derived from his treatment of Emma Eckstein. The last chapter of Studies on Hysteria (Breuer & Freud, 1895), in which Freud's first published use of the term transference occurs, can be read as a working through of the crisis which occurred when Eckstein nearly died. This new concept, it is argued, explained his patient's disturbed feelings toward him as a “false connection” and thereby helped to free him of feelings of personal involvement in her libidinal demands. The story of the troubled circumstances under which Freud discovered transference provides insight into the defensive nature of the concept, Freud's delay in writing on the subject, the paucity of materials he produced on it, and the fact that in his own work, Freud did not give transference the central attention it deserved. It also suggests how Freud's personal experience contributed to this major discovery.