Imagination is the production or simulation of novel objects, sensations, and ideas in the mind without any immediate input of the senses. Stefan Szczelkun characterises it as the forming of experiences in one's mind, which can be re-creations of past experiences, such as vivid memories with imagined changes, or completely invented and possibly fantastic scenes. Imagination helps make knowledge applicable in solving problems and is fundamental to integrating experience and the learning process. As an approach to build theory, it is called "disciplined imagination". A basic training for imagination is listening to storytelling (narrative), in which the exactness of the chosen words is the fundamental factor to "evoke worlds".

One view of imagination links it with cognition, seeing imagination as a cognitive process used in mental functioning. It is increasingly used - in the form of visual imagery - by clinicians in psychological treatment. Imaginative thought may - speculatively - become associated with rational thought on the assumption that both activities may involve cognitive processes that may "underpin thinking about possibilities". The cognate term, "mental imagery" may be used in psychology for denoting the process of reviving in the mind recollections of objects formerly given in sense perception. Since this use of the term conflicts with that of ordinary language, some psychologists have preferred to describe this process as "imaging" or "imagery" or to speak of it as "reproductive" as opposed to "productive" or "constructive" imagination. Constructive imagination is further divided into voluntary imagination driven by the lateral prefrontal cortex (LPFC) and involuntary imagination (LPFC-independent), such as REM-sleep dreaming, daydreaming, hallucinations, and spontaneous insight. The voluntary types of imagination include integration of modifiers, and mental rotation. Imagined images, both novel and recalled, are seen with the "mind's eye".

Imagination, however, is not considered to be exclusively a cognitive activity because it is also linked to the body and place, particularly that it also involves setting up relationships with materials and people, precluding the sense that imagination is locked away in the head.

Imagination can also be expressed through stories such as fairy tales or fantasies. Children often use such narratives and pretend play in order to exercise their imaginations. When children develop fantasy they play at two levels: first, they use role playing to act out what they have developed with their imagination, and at the second level they play again with their make-believe situation by acting as if what they have developed is an actual reality.