Considerable overlap in symptoms between patients with borderline personality disorder (BPD) and schizotypal personality disorder (STPD) complicates personality diagnostics. Yet very little is known about the level of psychodynamic functioning of both personality disorders. Psychodynamic assessment procedures may specify personality characteristics relevant for differential diagnosis and treatment planning. In this cross-sectional study we explored the differences and similarities in level of personality functioning and psychodynamic features of patients with severe BPD or STPD. In total, 25 patients with BPD and 13 patients with STPD were compared regarding their level of personality functioning (General Assessment of Personality Disorder), current quasipsychotic features (Schizotypal Personality Questionnaire), and psychodynamic functioning [Developmental Profile (DP) interview and Developmental Profile Inventory (DPI) questionnaire]. Both groups of patients showed equally severe impairments in the level of personality functioning and the presence of current quasipsychotic features. As assessed by the DP interview, significant differential psychodynamic patterns were found on the primitive levels of functioning. Moreover, subjects with BPD had significantly higher scores on the adaptive developmental levels. However, the self-questionnaire DPI was not able to elucidate all of these differences. In conclusion, our study found significant differences in psychodynamic functioning between patients with BPD and STPD as assessed with the DP interview. In complicated diagnostic cases, personality assessment by psychodynamic interviewing can enhance subtle but essential differentiation between BPD and STPD.