Freud (1900/1977, 1905/1977) based his theories of unconscious and psychosexual development on the link between the undischarged libidinal (sexual) tensions and neurosis. He postulated that when a conscious imaginary wish fulfilment (fantasy) was unacceptable to the fantasiser, it became repressed. Thus, it can be argued that the study of sexual fantasies laid the foundation for the birth of psychoanalysis. Freud’s suggestion about the universality of libidinal impulses has been supported by contemporary empirical research which reveals that 90-97% of people experience sexual fantasies (Kahr, 2007; Lehmiller, 2018; Leitenberg & Henning, 1995). The purpose of this hermeneutic literature review was to explore how literature from empirical sex research, psychoanalysis and psychotherapy might shed light on understandings of the meanings and use of sexual fantasy in the psychotherapeutic context. The synthesis of findings revealed that sexual fantasy is often constituted by images and scenarios that differ from heteronormative and mononormative western socio-cultural expectations of sexual practices and forms of desire. Sexual fantasies were found to cause anxiety, guilt, fear, and shame in the fantasiser. These disturbing feelings often prevented the fantasiser from looking at their fantasies with their sexual partner/s, and even themselves, resulting in silence around sexual fantasy. While sexual fantasy was theorised to hold invaluable information about the person’s unique psychology, attachment history, early experiences and internalised object relations, there appeared to be less clinical emphasis on the importance of verbalising, processing and understanding the meaning of sexual fantasy in psychotherapeutic context. The key theme identified that sexual fantasy can bring emotional transformation and healing, if explored and integrated into the psyche. These new understandings may help psychotherapists and other mental health professionals to use their client’s sexual fantasy as a therapeutic intervention, similar to the interpretation of dreams.