This conceptual review introduces Institutional Psychotherapy, a French movement that emerged around World War II as a clinical, political, and theoretical effort to prevent psychiatric institutions from becoming alienating asylums. It extends psychoanalytic practice into a collective, transference-based therapeutic milieu grounded in everyday life. Drawing on psychoanalysis, libertarian Marxism, and phenomenology, we present it as a flexible conceptual and critical toolbox rather than a fixed corpus. We identify two key distinctions and six “logical operators” that structure its originality and discuss its relevance for contemporary psychiatric practice and its tensions with current institutional trends.