Chitra Banerjee Divakaruni is one among the famous South Indian writers. She has concentrated in many areas such as diaspora, immigration, alienation, frustration, cultural clashes, myth and miracles. This research paper helps to guide the readers in a different aspect of entering into the dreamy world of Chitra Banerjee Divakaruni through the novel Queen of Dreams. Most of the researchers have focused on the familiar themes of Chitra Banerjee Divakaruni. But this article analyses the parallel study of Freud’s Interpretation of Dreams and Divakaruni’s Queen of Dreams. The concept of dream, similarities and dissimilarities, ideas relevant to dream, pros and cons of dream, how dream plays a psychological impact in the lives of human beings are explained in a crystal clear manner. The first generation immigrants are the people who moved to a new country and are the first in their families. They face many challenges adjusting to a new culture, language and societal norms while preserving their own heritage. The second generation immigrants are the people who are born in a new country to immigrant parents. They reveal the cultural influences from both their parents’ heritage and the society in which they are raised. The psychological sufferings of first and second generation are going to be dealt in this paper. The longingness and nostalgic memories affect present life as well as their career. One should maintain equanimity and mental balance to take great effort to achieve success in one’s own life. One way or the other way people try to chase their dreams and to attain wish fulfillment. The dream is driven by unconscious wish fulfillment. Freud explains that dream as a manifestation of one’s deepest desires and anxieties which are relating to repressed or oppressed childhood memories. Dreams are nothing but the stories and images of a mind which are created during the sleeping time. Dreams reveal the contents of subconscious mind. In the novel Queen of Dreams, the dreams and meanings of Mrs. Gupta play a vital role.