In the psychoanalytic theory, the notion of transference refers to the phenomenon where an individual projects the emotions and feelings for an individual from their past, onto a separate individual in the present. During the psychoanalytic treatment, the analyst mobilizes the symptoms of transference in order to improve their understanding of the analysand’s trauma, and to provide a different perspective to analysand’s problem, which is ultimately supposed to lead the process towards the psychoanalytic cure. Psychoanalytic tradition gave birth to a myriad of different conceptions of transference and different ways of directing the momentum of transference towards the cure. Therefore, this paper will introduce Freudian, Jungian and Lacanian notions of transference, elaborate their intricacies, and describe how each of them relates to the field of literature. The central part of this paper will directly deal with the role of transference in literature and in the process of reading. The discussion will strive to show how literary text represents a space where the reader not only encounters the author, but his own unconscious as well. In the end, the goal of this paper is to show how the therapeutic effects of reading are achieved though reader’s abandonment to the discursive system of the text, where his past is awakened by the interpretative process, then paraphrased, restructured and ultimately reintegrated back into their persona in a way that supports their mental health.