Melanie Klein, one of the pioneers of Object Relations Theory, first defined “projective identification”, which is regarded as one of the most efficacious psychoanalytic concepts after the discovery of the “unconscious”. Examination of the literature on “projective identification” shows that there are various perspectives and theories suggesting different uses of this concept. Some clinicians argue that projective identification is a primitive defense mechanism observed in severe psychopathologies like psychotic disorder and borderline personality disorder, where the intra-psychic structure has been damaged severely. Others suggest it to be an indispensable part of the transference and counter-transference between the therapist and the patient during psychotherapy and it can be used as a treatment material in the therapy by a skillful therapist. The latter group expands the use of the concept through normal daily relationships by stating that projective identification is one type of communication and part of the main human relation mechanism operating in all close relationships. Therefore, they suggest that projective identification has benign forms experienced in human relations as well as malign forms seen in psychopathologies. Thus, discussions about the definition of the concept appear complex. In order to clarify and overcome the complexity of the concept, Melanie Klein’s and other most important subsequent approaches are discussed in this review article. Thereby, the article aims to explain its important function in understanding the psychopathologies, psychotherapeutic relationships and different areas of normal human relations.