To Bettelheim, Grimms’ “Little Red Cap” deals with “The child’s ambivalence about whether to live by the pleasure principle or the reality principle”, between doing “what one likes to do and what one ought to do.” This is evidenced by “the fact that Red Cap stops gathering flowers only ‘when she had collected so many that she  could not carry any more.’ That is, only when picking flowers is no longer enjoyable does the pleasure-seeking id recede and Red Cap becomes aware of her obligations.” Comparing the relative maturity of Red Cap with the immaturity of children Hansel and Gretel, Bettlehim notes the four senses, “hearing, seeing, touching, and tasting”, as what “the pubertal child uses…to comprehend the world.” Bettelheim identifies two maternal figures, Red Cap’s mother and grandmother, “where neither…can do anything”, and he identified the “contradictory nature of the male”: “the selfish, asocial, violent, potentially destructive tendencies of the id (the wolf); [and] the unselfish, social, thoughtful, and protective propensities of the ego (the hunter)”. 

Bettelheim asserts that the red hue of Red Cap’s cloak symbolizes “violent emotions,… including sexual ones.” He asserts that “Little Red Cap’s danger is her budding sexuality, for which she is not yet emotionally mature enough.” Bettelheim explains that children see sex as inherently destructive and violent, referencing the wolf’s consumption of the girl. Bettelheim asserts that children unconsciously equate sexual excitement, violence, and anxiety, and that the story of “Little Red Cap” “holds a great unconscious attraction to children, and to adults who are vaguely reminded by it of their own childish fascination with sex.” Bettelheim sees the figure of the father embodied: “as the wolf, which is an externalization of the danger of overwhelming oedipal feelings, and as the hunger in his protective reducing function.”

Bettelheim explains that Red Cap and grandmother are “reborn” by emerging out of the wolf’s stomach. The girl loses her innocence in being swallowed and reaches “a higher plane of existence” when cut out of the wolf’s belly, losing her childish innocence and assuming the life of a young maiden.