Sandor Ferenczi was Freud's most brilliant disciple, reevaluated after his historical eclipse and later idealization. As a “wise baby,” he demonstrated extraordinary clinical acuity as well as a propensity for wild analysis. Despite his confusion regarding conscious confabulation versus unconscious fantasy, he illuminated critical issues of reality–fantasy and objectivity–subjectivity in the theory and practice of psychoanalysis. Ferenczi significantly contributed to present concepts of psychic trauma, countertransference, empathy, and the analyst as participant–observer. Ferenczi illuminated the relationship between perpetrator and victim of child sexual abuse but regarded the child as blissfully innocent. The Freud–Ferenczi relationship is important to the history of psychoanalysis and the evolution of psychoanalytic thought.