In psychoanalysis, psychosexual development is a central element of the sexual drive theory. According to Sigmund Freud, personality develops through a series of childhood stages in which pleasure-seeking energies from the child become focused on certain erogenous areas. An erogenous zone is characterized as an area of the body that is particularly sensitive to stimulation. The five psychosexual stages are the oral, the anal, the phallic, the latent, and the genital. The erogenous zone associated with each stage serves as a source of pleasure. Being unsatisfied at any particular stage can result in fixation. On the other hand, being satisfied can result in a healthy personality. Sigmund Freud proposed that if the child experienced frustration at any of the psychosexual developmental stages, they would experience anxiety that would persist into adulthood as a neurosis, a functional mental disorder.

Sigmund Freud (1856–1939) observed that during the predictable stages of early childhood development, as introduced in his major work publication Three Essays on the Theory of Sexuality in 1905. The child's behavior is oriented towards certain parts of their body, for example the mouth during breast-feeding or the anus during toilet-training. In psychoanalysis, the adult neurosis (an outdated term for certain anxiety disorders, functional mental disorder) is thought to be rooted in fixations or conflicts encountered during the developmental stages of childhood sexuality. According to Freud, human beings are born "polymorphous perverse": infants can derive sexual pleasure from any part of their bodies and any object. Over time, the socialization process channels the (originally non-specific) libido into its more fixed mature forms. Given the predictable timeline of childhood behavior, he proposed "libido development" as a model of normal childhood sexual development, wherein the child progresses through five psychosexual stages – the oral; the anal; the phallic; the latency; and the genital – in which the source pleasure is in a different erogenous zone.

Sexual infantilism: in pursuing and satisfying their libido (sexual drive), the child might experience failure (parental and societal disapproval) and thus might associate anxiety with the given erogenous zone. To avoid anxiety, the child becomes fixated, preoccupied with the psychological themes related to the erogenous zone in question. The fixation persists into adulthood and underlies the personality and psychopathology of the individual. It may manifest as mental ailments such as neurosis, hysteria, "female hysteria", or personality disorder.

The first stage of psychosexual development is the oral stage, spanning from birth until the age of one year, where in the infant's mouth is the focus of libidinal gratification derived from the pleasure of feeding at the mother's breast, and from the oral exploration of their environment, i.e. the tendency to place objects in the mouth. The child focuses on nursing, with the intrinsic pleasure of sucking and accepting things into the mouth. Since the ego is not developed beyond the most rudimentary form at this stage (in the oral stage, the id is fully present, the ego begins to emerge and the super ego is not yet developed), every action is based upon the pleasure principle of the id. Nonetheless, the infantile ego is in the process of forming during the oral stage. In developing a body image, infants are aware of themselves as discrete from the external world; for example, the child understands pain when it is applied to their body, thus identifying the physical boundaries between body and environment. The experience of delayed gratification leads to understanding that specific behaviors satisfy some needs; for example, crying gratifies certain needs.

Weaning is the key experience in the infant's oral stage of psychosexual development, their first feeling of loss consequent to losing the physical intimacy of feeding at their mother's breast. The child is not only deprived of the sensory pleasures of nursing but also of the psychological pleasure of being cared for, mothered, and held. However, weaning increases the infant's self-awareness, through learning that they do not control their environment. The experience of delayed gratification leads to the formation of capacities for independence (awareness of the limits of the self) and trust (behaviors leading to gratification). Thwarting of the oral-stage – too much or too little gratification of desire – might lead to an oral-stage fixation, which can be the root of neurotic tendencies in the developed personality. In the case of too much gratification, the child does not adequately learn that they do not control the environment, and that gratification is not always immediate, thereby forming an immature personality. In the case of too little gratification, the infant might become passive upon learning that gratification is not forthcoming, despite having produced the gratifying behavior.

The second stage of psychosexual development is the anal stage, spanning from the age of eighteen months (one year) to three years, wherein the infant's erogenous zone changes from the mouth (the upper digestive tract) to the anus (the lower digestive tract), while ego formation continues. Toilet training is the child's key anal-stage experience, occurring at about the age of two years. It involves conflict between the id (demanding immediate gratification) and the ego (demanding delayed gratification) in eliminating bodily wastes, and handling related activities (e.g. manipulating excrement, coping with parental demands). The child may respond with defiance, resulting in an "anal expulsive character"—often messy, reckless, and defiant—or with retention, leading to an "anal retentive character"—typically neat, precise, and passive-aggressive. The style of parenting influences the resolution of the conflict, which can be either gradual and psychologically uneventful, or which can be sudden and psychologically traumatic.

The ideal resolution of the conflict is that the child adjusts to moderate parental demands that teach the value and importance of physical cleanliness and environmental order, thus producing a self-controlled adult. The outcome of this stage can permanently affect the individual's propensities toward possession and attitudes toward authority. If the parents make immoderate demands of the child, by too strictly enforcing toilet training, it might lead to the development of a compulsive personality, a person too concerned with neatness and order. If the parents consistently allow the child to indulge the impulse, the child might develop a self-indulgent personality characterized by personal slovenliness and environmental disorder.

The third stage of psychosexual development is the phallic stage, spanning the ages of three to six years, where in the child's genitalia are their primary erogenous zone. It is in this third infantile development stage that children become aware of their bodies, the bodies of other children, and the bodies of their parents; they gratify physical curiosity by undressing and exploring each other as well as their genitals, and so learn the physical (sexual) differences between male and female and their associated social roles. In the phallic stage, a boy's decisive psychosexual experience is the Oedipus complex—his son–father competition for possession of his mother. The name derives from the 5th-century BC Greek mythological character Oedipus, who unwittingly killed his father and sexually possessed his mother. In the young male, the Oedipus conflict stems from his natural love for his mother, a love which becomes sexual as his libidinal energy transfers from the anal region to the genital. The boy observes that his father stands in the way of his love and desire for possession of his mother. He therefore feels aggression and envy towards his father, but also a fear that his (much stronger) rival will strike back at him. As the boy has noticed that women, his mother in particular, have no penises, he is particularly struck by the fear that his father will remove his penis too. This castration anxiety surpasses his desire for his mother, so the desire is repressed. Although the boy sees that he cannot possess his mother, he reasons that he can possess her vicariously by identifying with his father and becoming as much like him as possible: this identification is the primary experience guiding the boy's entry into his appropriate sexual role in life. A lasting trace of the Oedipal conflict is the superego, the voice of the father within the boy. By thus resolving his incestuous conundrum, (a complex word used by Freud to refer to the emotional struggle a child experiences during the Oedipus complex) the boy passes into the latency period, a period of libidinal dormancy.