A longstanding problem with the study of empathy is the lack of a clear and agreed upon definition. A trend in the recent literature is to respond to this problem by advancing a broad and all‐encompassing view of empathy that applies to myriad processes ranging from mimicry and imitation to high‐level perspective taking. I argue that this response takes us in the wrong direction and that what we need in order to better understand empathy is a narrower conceptualization, not a broader one. I propose that empathy be conceptualized as a complex, imaginative process through which an observer simulates another person's situated psychological states while maintaining clear self–other differentiation. I defend my view through an examination of three processes: emotional contagion, a process of self‐oriented perspective taking that I call “pseudo‐empathy,” and empathy proper. Drawing on recent findings in social neuroscience, I highlight the differences among these processes and discuss conceptual, empirical, and normative reasons for keeping them theoretically and conceptually distinct.