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In 1952, Hildegard Peplau published her textbook Interpersonal Relations in Nursing: A Conceptual Frame of Reference for Psychodynamic Nursing. This was the same year the American Psychiatric Association (APA) published the first edition of the Diagnostic and Statistical Manual of Mental Disorders (1st ed.; DSM-I; APA). These events occurred in the context of a rapidly changing policy and practice environment in the United States after World War II, where the passing of the National Mental Health Act in 1946 released vast amounts of funding for the establishment of the National Institute of Mental Health and the development of advanced educational programs for the mental health professions including nursing. This article explores the work of two nurse leaders, Hildegard Peplau and Dorothy Mereness, as they developed their respective graduate psychiatric nursing programs and sought to create new knowledge for psychiatric nursing that would facilitate the development of advanced nursing practice. Both nurses had strong ideas about what they felt this practice should look like and developed distinct and particular approaches to their respective programs. This reflected a common belief that it was only through nurse-led education that psychiatric nursing could shape its own practice and control its own future. At the same time, there are similarities in the thinking of Peplau and Mereness that demonstrate the link between the specific social context of mental health immediately after World War II and the development of modern psychiatric nursing. Psychiatric nurses were able to gain significant control of their own education and practice after the war, but this was not without a struggle and some limitations, which continue to impact on the profession today.