In this paper, the author examines two episodes in Freud's early professional life which, she suggests, played a crucial role in the development of psychoanalysis. As a result of these episodes, Freud's warm relationship with Jean-Martin Charcot cooled markedly and his more intimate relationship with Josef Breuer broke down altogether. While Freud never referred to the circumstances surrounding these rifts, the author proposes that both cases had, at their core, issues surrounding scientific theories of the time about innate Jewish tendencies to neuropathic disease and hysteria, theories which played an important role in the development of racial anti-Semitism. She proposes that these theories contributed in important respects to Freud's historic leap from the prevailing theory of heredity as the primary cause of hysteria to one of a sexual aetiology.