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The negotiation of paradox may be considered as an essential vehicle of the therapeutic action of psychoanalysis. The paradoxes inherent to the psychoanalytic experience are considered here with particular reference to Winnicott's writings, which abound in, and require, paradox. These paradoxes are evident in the following juxtapositions: the subjectively conceived object versus the objectively perceived object; personal isolation versus relatedness; ruthlessness versus concern; and dependence versus independence. In analysis, the framework for the transitional area of illusion is maintained through a continuing intersubjective process of negotiation, by which analyst and patient seek to straddle the paradoxes of their many‐layered relationship. This ongoing process of negotiation carries both the potential for structure building and the delicate hope for a reworking of repetitions in the transference‐countertransference construction. Exploration of these issues includes consideration of the analyst's and patient's coauthorship of metaphorical communications and a definition of the analyst's neutrality in terms of his responsibility to preserve the area of illusion for ongoing negotiation. Finally, detailed clinical material serves to illustrate the process of negotiation in the course of a treatment.