The term pseudologia fantastica has been fairly widely used despite the lack of consensus as to its definition. Little attention has been paid to its diagnostic significance. As a presenting symptom it can be confused with delusional psychosis, confabulation, malingering, or mere lying. In this article the literature is briefly reviewed, and the diagnostic significance of pseudologia fantastica in cases of neuropsychiatric, delusional, and personality disorders is illustrated with two clinical vignettes.