Transference is a key concept in psychoanalysis, distinguishing the analytic treatment from other forms of psychotherapy. In this essay, the authors place transference into the context of a general psychology of human functioning and link it to the neurobiology of perception. The authors briefly review the literature within and outside of psychoanalysis, define transference through the lens of perception, and propose that it is ubiquitous in humans. When not impaired, transference is an adaptive ego function that emerges, along with countertransference, in the context of any interpersonal situation of significant emotional import. The authors draw on W. Freeman’s (2003, 2004) research on olfaction, which has since been replicated in other sensory modalities, for a neurodynamic basis for their model of perception and describe how transference may be thought of as an evolved form of it. The authors’ view is that transference is a hierarchically integrated perceptual modality of a higher order, although it depends on the same neurodynamic processes as those found in each sensory modality.