As to the first, this book is famous for showcasing an application of Freud's method of psychoanalysis. He claims that the legend of Moses developed in order to adapt it to cultural norms and provide a narrative for the Jewish people—however, he argues that Moses was born to Egyptian parents. Freud notes that Freud's notional Jewish parents and his (allegedly) real-life Egyptian parents are psychoanalytically the same, despite the former being humble and the latter being noble.

Normally, Freud remarks, the real family is humble and the fictitious family is noble, but the situation is often reversed to promote a good story. The likelihood of Moses's story's reversal is enhanced by its similarity to other mythic heroes, whom noble families cast out to be adopted by poor ones.

To further support this contention, Freud asserts that Moses's developmental psychology can be expected to reject the qualities he disliked in his father (an Egyptian noble) only to exhibit those qualities later. This makes it more likely, according to Freud, that Moses was an exiled Egyptian who promoted the worship of Aton.

The legend is important to the concept of monotheism (with which Freud credits Moses). Freud states that Moses was born to a wealthy Egyptian family and adopted by the Jewish people when he goes into exile in Israel, promoting monotheism. Freud reminds us that monotheism was an Egyptian invention, not a Jewish one (and historical and archaeological sources widely support the existence of a sun god, Aton). Freud claims that Moses promoted the worship of Aton as a replacement for the local Babylonian god, Jahve.

The difference for which Moses is responsible is the invisibility of the Jewish God. Moses's injunction to the Jews to worship an invisible God is also attested in the Bible. This idea (according to Freud) gave the Jews cultural power, because an invisible God encouraged the cultivation of the intellect.