Peter Fonagy and Mary Target present their Playing with Reality theory as a developmental theory centred on the concept of psychic reality. This article compares Fonagy and Target’s use of the concept of psychic reality with Freud’s original concept. It is argued that the concept of psychic reality has been redefined from delineating a psychic reality stemming from the unconscious to denoting a kind of conscious or preconscious psychological reality characterized by an experience of equality between the internal and the external world. The theoretical discussion is illustrated by being applied to eating disorder pathology, which by Fonagy and colleagues is described as associated with thought processes characterized by psychic reality.