The longstanding human interest in dreams has led to a significant body of psychological and philosophical discourse, including research. Recently, however, dreams have been relegated to the periphery of clinical psychological practice. This is potentially problematic as clients continue to bring dreams to therapy and many psychologists lack the confidence or competence to respond effectively to dream material. Building on the structural, professional and research cultures surrounding psychology using a cultural-historical activity theory framework, we argue the marginalisation of dreams is due to cultural-historical factors. These factors include the political and economic context in which psychology developed; psychology's early attempts to differentiate from psychoanalysis by identifying with behaviourism and the natural sciences; and a discipline-specific definition of what constitutes evidence-based practice. These factors led to professional discourses within which dreams are seen as of little clinical or therapeutic value, or that dream work is only for long-term therapy and requires extensive therapist training. However, there are diverse models of dream work consistent with most theoretical orientations within contemporary psychological practice. We conclude with recommendations on how to rebuild clinical confidence and competence in the use of dream material within the current professional environment.