Both Freud and psychoanalysis have been criticized in very extreme terms. Exchanges between critics and defenders of psychoanalysis have often been so heated that they have come to be characterized as the Freud Wars. Popper argued that psychoanalysis is a pseudoscience because its claims are not testable and cannot be refuted; that is, they are not falsifiable. For example, if a client's reaction was not consistent with the psychosexual theory then an alternate explanation would be given (e.g., defense mechanisms, reaction formation). Karl Kraus, an Austrian satirist, was the subject of a book written by noted libertarian author Thomas Szasz. The book Anti-Freud: Karl Kraus's Criticism of Psychoanalysis and Psychiatry, originally published under the name Karl Kraus and the Soul Doctors, portrayed Kraus as a harsh critic of Sigmund Freud and of psychoanalysis in general. Other commentators, such as Edward Timms, author of Karl Kraus - Apocalyptic Satirist, have argued that Kraus respected Freud, though with reservations about the application of some of his theories and that his views were far less black-and-white than Szasz suggests.

Grunbaum argues that psychoanalytic based theories are falsifiable, but that the causal claims of psychoanalysis are unsupported by the available clinical evidence. Other schools of psychology have produced alternative methods for psychotherapy, including behavior therapy, cognitive therapy, Gestalt therapy and person-centered psychotherapy. Hans Eysenck determined that improvement was no greater than spontaneous remission. Between two-thirds and three-fourths of "neurotics" would recover naturally; this was no different from therapy clients. Prioleau, Murdock, Brody reviewed several therapy-outcome studies and determined that psychotherapy is not different from placebo controls.

Michel Foucault and Gilles Deleuze, as a sociological analysis without meaning to criticize, claimed that the institution of psychoanalysis has become a center of power and that its confessional techniques resemble the Christian tradition. Strong criticism of certain forms of psychoanalysis is offered by psychoanalytical theorists. Jacques Lacan criticized the emphasis of some American and British psychoanalytical traditions on what he has viewed as the suggestion of imaginary "causes" for symptoms and recommended the return to Freud. Together with Gilles Deleuze, Félix Guattari criticised the Oedipal structure. Luce Irigaray criticised psychoanalysis, employing Jacques Derrida's concept of phallogocentrism to describe the exclusion of the woman from Freudian and Lacanian psychoanalytical theories.

Due to the wide variety of psychoanalytic theories, varying schools of psychoanalysis often internally criticize each other. One consequence is that some critics offer criticism of specific ideas present only in one or more theories, rather than in all of psychoanalysis while not rejecting other premises of psychoanalysis. Defenders of psychoanalysis argue that many critics (such as feminist critics of Freud) have attempted to offer criticisms of psychoanalysis that were in fact only criticisms of specific ideas present only in one or more theories, rather than in all of psychoanalysis. As the psychoanalytic researcher Drew Westen puts it, "Critics have typically focused on a version of psychoanalytic theory—circa 1920 at best—that few contemporary analysts find compelling. In so doing, however, they have set the terms of the public debate and have led many analysts, I believe mistakenly, down an indefensible path of trying to defend a 75 to 100-year-old version of a theory and therapy that has changed substantially since Freud laid its foundations at the turn of the century." A further consideration with respect to cost is that in circumstances when lower cost treatment is provided to the patient as the analyst is funded by the government, then psychoanalytic treatment occurs at the expense other forms of more effective treatment.

Freud's psychoanalysis was criticized by his wife, Martha. René Laforgue reported Martha Freud saying, "I must admit that if I did not realize how seriously my husband takes his treatments, I should think that psychoanalysis is a form of pornography." To Martha there was something vulgar about psychoanalysis and she dissociated herself from it. According to Marie Bonaparte, Martha was upset with her husband's work and his treatment of sexuality.

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