In his “Philosophical Letters on Dogmatism and Criticism” (1795; 1804), Schelling contends that by the postulate of the existence of God, Kant does not mean the demand to assume the existence of God theoretically, for the sake of moral progress and therefore in a mere practical intention, but the demand to realize practically the moral implication of the idea of God. This paper has two related aims. The first is to explain and endorse Schelling’s view. The second is to show that we will only understand Schelling’s view if we keep in mind the crucial difference between the fate of theoretical reason and the fate of practical reason, as conceived by Kant. As I also argue, Schelling’s reading of Kant’s postulate of the existence of God requires a new way of understanding both how Kant conceives the relationship between virtue and happiness in the highest good and why there is a dialectic or conflict of reason in its practical use.