Alfred Adler was born in Vienna to wealthy parents. In 1895, he earned medical degree from University of Vienna. He then practiced general medicine before going into psychiatry. He developed an interest in Freudian psychology after reading The Interpretation of Dreams. In 1902, he began participating in Freud's weekly discussion groups, becoming part of Freud's inner circle. In 1910, Freud named him president of Vienna Psychoanalytic Society. Adler resigned a year later, as major differences between the two men became increasingly apparent. Unlike Freud, Adler stressed the conscious mind rather than unconscious mind, social motives rather than sexual motives, and free will rather than determinism. Adler called his psychological system "individual psychology." In 1920s, his work was well regarded throughout the world, and he developed a following. In 1934, he moved to the United States and became professor of medical psychology at Long Island College of Medicine in New York.

Adler's ideas have their foundation in a book he wrote in 1907 about organ inferiority and compensation. He postulated that persons born with defective body parts learn to adjust through "compensation" -- by developing extra strength in other parts -- or through "overcompensation" -- by converting the weakness into a strength. Later, he expanded his position, claiming that these compensatory mechanisms also apply to psychological inferiorities. He believed that feelings of inferiority motivate all personal growth. However, these feelings can also overwhelm and come to disable persons (interiority complex).

Adler was influenced by the "as if" philosophy of Hans Vaihinger (1852-1933). Adler believed that one's early experiences as child generate what he called a "worldview." Then, based on this worldview, the child plans for the future by creating "guiding fictions" (future goals). The result is the formation of a "lifestyle" that determines how one interacts with the world. For Adler, a truly effective lifestyle is one that strives for the betterment of society. The alternative is a "mistaken lifestyle," whose job it is for the therapist to correct. Adler did not accept the Freudian notion that persons are victims of their past. Instead, he believed that humans are free to choose their own destiny, which he embraced in his concept of the "creative self." Adler's individual psychology continues to this day to have a following.