This chapter is an attempt at an interdisciplinary dialogue between literature, psychoanalysis and chaos theory. These three fields are linked by the phenomenon of ‘recursion’. Recursion is the repetition of a self-similar feature, pattern or dynamic across different scales, levels, frames or time. Recursion is a well-recognised phenomenon in literature, psychoanalysis and chaos theory. A convergence of research from different disciplines (including neuroscience, psychology and linguistics) indicates that recursion is a primary characteristic and defining feature of the human brain and mind. Literature and psychoanalysis have a shared interest in the mind and patterns of the mind. They also share an interest in the correspondence between literary and psychic process. Chaos theory – with its concepts of non-linear dynamics and the recursive structures and patterns of self-similarity across scale – offers a scientific frame for the study and understanding of the recursive mind. Recursion as a feature and theme of literature is discussed, and a critical reading of William Faulkner’s novel Absalom, Absalom! is considered as a literary expression and illustration of the recursive mind. Finally, the same recursive property of the mind is shown to underlie two core psychoanalytic concepts: deferred action (Nachträglichkeit) and transference.