This theoretical essay investigates theories concerning the function of dreams and dreaming starting with the contributions made by Freud (1900) to the present day. Several theories within psychodynamic, evolutionary and neurocognitive perspectives are presented and discussed in light of relevant empirical research. These include theories which postulate that the function of dreaming is to guard sleep (Freud, 1900) and theories which propose that dreaming poses an adaptive advantage either by allowing for the simulation and rehearsal of threat avoidance behaviours (Revonsuo, 2000), practicing social skills (Franklyn & Zephyr, 2005), solving emotional or intellectual problems (e.g. Barrett, 2007; Hartmann, 1996) or aids us in the consolidation of memories (Paller & Voss, 2004). Theories that view dreaming as being functionally epiphenomenal are also discussed, such as proposals that dreaming is a by-product of the development of specific cognitive abilities (Domhoff, 2010) or merely a reflection of sleep-related changes which occur in the brain (Hobson, Pace-Schott & Stickgold, 2000). It appears that the theories presented in this essay are limited in accounting for much of the empirical evidence derived from the content analysis of dreams and the study of related neural correlates, and few attempts have been made at integrating some of the perspectives to provide a more comprehensive understanding of the nature and function of dreams and dreaming. Possible reasons for this are discussed, as well as proposals for how several theories may be integrated, followed by suggested avenues for future research and concluding remarks.