Results of the large number of studies stimulated by the theory of psychological differentiation now make revision of the theory necessary. The model that is proposed seeks to accommodate the recently accumulated findings on interpersonal behavior, cognitive restructuring skills and localization of neurophysiological functions. Central components of this model are the field depenedent and fieldind cognitive styles. These styles are conceived as tendencies to rely on internal or external referents in information processing, stemming from differences in extent of self-nonself segregation. Reflecting these contrasting tendencies, field independent people do well in cognitive restructuring tasks and are limited in social sensitivity and social skills; field dependent people have greater social sensitivity and social skills but are not as competent in cognitive restructuring. The field dependence-independence cognitive-style dimension is thus bipolar with regard to level, having no clear "high" or "low" ends; and it is neutral with regard to value, each pole having qualitites adaptive in particular circumstances. A distinction is drawn between people who are fixed in their use of a fielddependent or field independent style and those who are mobile, having access to both. (86pp.) (Replaced by RB-77-16 and RB-77-17).