The psychological concept of illusion is defined as a process involving an interaction of logical and empirical considerations. Common usage suggests that an illusion is a discrepancy between one's awareness and some stimulus. Following preliminary definitions of classes of stimuli, five definitions of illusion are considered, based upon the possible discrepancies between awareness and a stimulus. It is found that each of these definitions fails to make important distinctions, even to the point of equating all illusory and perceptual phenomena. This (...) dilemma is resolved by redefining illusion without reference to truth or falsity, but relative to the functioning of a given perceptual system under different conditions. The definition accepted as best is 'a discrepancy between one's perceptions of an object or event observed under different conditions'. Conditions may differ in terms of stimulus exposure, stimulus context, or experiental context. The philosophical and psychological implications are discussed of accepting a definition of illusion not based on a discrepancy between awareness and a stimulus. (shrink)