According to several theories of psychology, an understanding of a child's conversations with their imaginary friends can reveal a lot about the anxieties and fears of that child as well as the child's aspirations and perception of the world. Some children report that their "imaginary friends" manifest themselves physically and are indistinguishable from "real" people, while others say that they see their friends only in their heads.

A long-time popular misconception is that most children dismiss or forget the imaginary friend once they begin school and acquire 'real' friends. According to one study, by the age of seven, sixty-five
percent of children report that they have had an imaginary companion at some point in their lives. Some psychologists have suggested that children simply retain but stop speaking about imaginary friends, due to adult expectations and peer pressure. Children have reported creating or maintaining imaginary friends as pre-teens or teenagers, and very few adults report having imaginary friends. This may, however, signal a serious psychological disorder.