This chapter looks at the formative role Shakespeare played in the development of Freud’s psychoanalytic theory. Freud began reading Shakespeare when he was eight years old and quoted from the plays in letters to his friends, his colleagues, and his future wife. He used lines from the plays to help him grasp difficult issues in his life such as failure and death. Themes, images, plots, and lines from the plays thus form part of the raw material from which Freud constructed psychoanalysis. Freud’s intertextual relationship with Shakespeare took many forms including quotation, allusion, and literary interpretation. Some of the allusions are deeply embedded in Freud’s texts in a manner that even Freud may not have been aware of. As well as his extensive correspondence with Wilhelm Fliess, this chapter considers a range of psychoanalytic texts from across Freud’s career (from his studies in hysteria to Beyond the Pleasure Principle) by considering a range of texts from across Shakespeare’s—including A Midsummer Night’s Dream and 1 Henry IV—while giving extended analyses of his engagement with Hamlet, The Merchant of Venice, and King Lear.