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In this paper I will investigate the concept of "transcendental idealism" in the System of Transcendental Idealism (1800). My aim is to outline the difficulties surrounding the concept. This paper argues that there is a marked tension between the different senses of the expression "transcendental idealism" and that in order to solve this tension Schelling tends to relativize the role of idealism in his system. In furtherance of this, I read this work of Schelling in the context of other texts, in particular, On the True Concept of the Philosophy of Nature and the Presentation of My System of Philosophy, both of 1801.