This article reviews the development of the second edition of the Psychodynamic Diagnostic Manual, the PDM-2. We begin by placing the PDM in historical context, describing the structure and goals of the first edition of the manual, and reviewing some initial responses to the PDM within the professional community. We then outline 5 guiding principles intended to maximize the clinical utility and heuristic value of PDM-2, and we delineate strategies for implementing these principles throughout the revision process. Following a discussion of 2 PDM-derived clinical tools—the Psychodiagnostic Chart and Psychodynamic Diagnostic Prototypes, we review initial research findings documenting the reliability, validity, and clinical value of these 2 measures. Finally, we discuss changes proposed for implementation in PDM-2 and the potential for an updated version of the manual to enhance clinical practice and research during the coming years.