In this essay, I examine links among gender, sexual attraction, and sexual orientation rooted in the role of loss and mourning in the process of gender identity development. Building on the work of Fast (1984) and Butler (1995), I describe some of the psychological losses inherent in gender identity development and trace their effects on the structure of adult gender identity and sexual relationships. I propose that many important phenomena in the arena of gender and sexuality can be illuminated from this perspective, including a hidden perverse element in the structure of many adult heterosexual relationships. These speculations are offered in the context of current efforts to understand the psychodynamics of heterosexuality—a topic that has been neglected as a result of the long‐standing tendency in the psychoanalytic literature to problematize (and pathologize) only “deviant”; sexualities (Chodorow, 1992).