Freud believed that psychotic depression, formerly known as melancholia, was caused by internalized feelings of guilt, hatred, shame, or anger. The internalized feelings caused a regression to infantile narcissism, in which the person identified extremely with an original target of uncomfortable emotions. Instead of properly directing anger or hatred toward the originally intended target, the individual becomes self-absorbed. For example, Freud treated a young woman who exhibited signs of extreme depression. She was cutting herself in one spot on her arm and became suicidal. She felt completely inadequate and impotent as a human being.

             Through psychotherapy, Freud traced the origins of her self-directed anger toward the woman's mother. The spot on the woman's arm that she continuously picked at happened to be the same spot in which her mother had a birth mark. With Freud's help the woman discovered that she had subsumed her personal identity by her mother's: instead of acknowledging her hatred of her mother she developed self-hatred. Appignanesi notes that the extreme misidentification of the self is called "introjection" (p. 142). Freud framed introjection in terms of the stages of development, by noting that the infantile narcissism reverts to the stage between the oral and anal stages: the infant "alternates between love and hate" (p. 142).

             Although modern psychologists and psychiatrists would attribute cases of clinical depression to a chemical imbalance and treat the condition using drugs, Freud's theories allow for a potentially illuminating self-examination and psychological analysis. Internalized feelings may indeed be the root cause of mental illnesses like depression and it may be fruitful to trace back the origins of self-hatred to the original target. As Freud postulated, the original target will in many cases be a close family member because of the child's focus on the parents or caregivers.