This contribution discusses the concept of psychology of religion by Traugott Konstantin Oesterreich (1880–1949), who analyzed religiosity in the tradition of French psychopathology and German philosophy. Inspired by William James, the main focus of his research was on individual religious experience. He considered dissociative processes (such as depersonalization and derealization) as the foundation of mystical and ecstatic experiences. Employing different religious phenomena, like glossolalia, inspiration, and states of possession, Oesterreich assumed that ego division and trance experiences are necessary to understand the development of religiosity in different cultures. Furthermore, Oesterreich emphasized parapsychology for the interpretation of religious experiences. Oesterreich’s approach to examine religiosity in terms of dissociative mechanisms is discussed in relation to contemporary research.