The authors present a new method of mindful processing that is used for processing disturbing experiences and transforming the personal sense of self. The method is used within mindfulness- and compassion-oriented psychotherapy (MCIP) and can be easily integrated with other psychotherapy approaches. In this method of mindful processing, the therapist intentionally invites the client to bring mindful awareness to their present emotions and body sensations evoked by painful memories or dysfunctional schema. The client alternates between mindful awareness of experience and sharing their experience with the therapist. The client is invited to pay attention to their moment-to-moment experience with curiosity and acceptance. Such a stance towards the inner experience promotes processing and transformation of disturbing experiences. The therapist helps the client to maintain a mindful stance and is fully present in the relationship. The method could also be called “relational meditation”, as both client and therapist are in a mindful state of consciousness and are fully present. The authors describe seven phases of the method, including practical examples and discuss how mindful processing promotes memory reconsolidation. The authors propose that mindful processing activates the brain’s innate error detection system and provides new emotional and relational experiences that promote memory reconsolidation.