He is today best remembered for his close friendship and theoretical collaboration with Sigmund Freud, a controversial chapter in the history of psychoanalysis.

This became widely known following the publication of his controversial book Neue Beitrage und Therapie der nasalen Reflexneurose in Vienna in 1892.

The theory postulated a connection between the nose and the genitals and related this to a variety of neurological and psychological symptoms; Fliess devised a surgical operation intended to sever that link.

On Josef Breuer's suggestion, Fliess attended several conferences with Sigmund Freud beginning in 1887 in Vienna, and the two soon formed a strong friendship.

[2] Emma Eckstein (1865–1924) had a particularly disastrous experience when Freud referred the then 27-year-old patient to Fliess for surgery to remove the turbinate bone from her nose, ostensibly to cure her of premenstrual depression.

His niece Beate Hermelin (née Fliess) was an experimental psychologist who worked in the UK, where she made major contributions in what is now known as developmental cognitive neuroscience.

[2] Martin Gardner suggested that Freud's willingness to entertain Fliess's "crackpottery" casts doubt on psychoanalysis itself and has strongly condemned what he viewed as orthodox Freudians' attempts to hush up an embarrassment in the history of the movement.