The purpose of the current study has been to analyse, in parallel, the works of two American brothers, William and Henry James, who dominated and influenced the psychological and literary standards of the twentieth century. The corpus of the research consisted of the following theoretical works: “The Principles of Psychology” by William James, ‘The Art of the Novel: Critical Prefaces’ and “Literary Criticism: Essays on Literature, American Writers, English Writers” by Henry James, as well as Henry James’s novels: “The Portrait of a Lady”, “What Maisie Knew”, and “The Ambassadors”. The evidence from this study suggests that a set of certain psychological concepts has been treated by both brothers and that a lot of similar ideas can be found in their works. Both were interested in how the human mind works and tried to experiment with modernist ideas and concepts, such as the stream of consciousness, point of view, impressions, emotions, sensations and perceptions