The main character in "The Yellow Wallpaper," Jane, is mentally ill. The story, written in first person epistolary style, is rife with dramatic irony because of its unreliable narrator. Readers have to ferret out the true psychological condition from what Jane says and from what she doesn't exactly say.
At the beginning of the story, Jane suffers from what today's mental health professionals would term post-partum depression. The baby isn't mentioned often, but the couple has retained hired help to care for the baby because he makes Jane "so nervous." Jane's husband, a physician, tells her she has "temporary nervous depression" and "a slight hysterical tendency," but "he does not believe [she] is sick." Thus he prescribes various tonics, but the primary therapy is "the rest cure," which means she isn't allowed to do any work or to socialize much.
Under the negative effects of the rest cure, Jane's condition becomes progressively worse through the story, but the reader must glean that information through the sometimes misleading descriptions Jane gives. She begins obsessing about the wallpaper fairly early in the story. Then her depression worsens--she reports that she cries at nothing, and she cries most of the time, except when John is around. She begins to grow confused, saying it takes "great effort for me to think straight." She then begins to hallucinate, seeing things behind the wallpaper, eventually believing that a woman is trapped there.
As her psychosis worsens, she becomes paranoid. She admits she is "getting a little afraid of John," and she suspects Jennie, John's sister, of being false toward her. She becomes manic, hardly sleeping at all at night. Her hallucinations worsen so that she has olfactory hallucinations. She starts to have violent thoughts and actions toward herself and others. All the furniture is removed from her room to prevent her from hanging herself, but she still smuggles a rope into her room somehow. She bites off the corner of the bed frame in anger. She sees creeping women outside now as well as the one in her room.
At the end of the story, she has become completely psychotic and dissociated, believing that she is now the woman behind the wallpaper, and she refers to herself (Jane) in the third person and doesn't recognize her husband.
The story shows that ignorance and shame regarding mental illness causes doctors and family members to recommend therapy that actually worsens the condition.