Psychoanalytic views of reality and fantasy are contingent upon a theory of ego/mind: A mental-apparatus-objective approach is distinguishable from an experiential-subjective approach. These two views are highly correlated with Being and Doing as underlying modalities of processing experience. Adolescent development necessitates the integration and amalgamation of these two modalities, which are reflected in relating to reality as objective and separate from, or as merged and fused with, the ego, with corresponding fantasy contents and ego states. As social reality exists as an independent variable, it poses real problems for such crucial aspects of adolescence as identity formation, psychosocial moratorium, and the generational gap.