There has been growing interest in the application of Piaget's theory to understanding children's thinking in clinical contexts. However, many such applications have been naive and accompanied by misconceptions. The present article deals specifically with the period of formal operations and its usefulness in understanding adolescent thinking. Literature is reviewed which leads to the conclusion that the formal operations concept has little clinical explanatory power. Formal operations represents an ideal description of intellectual competence, whereas clinicians must deal with factors influencing actual performance. Three performance factors are described which are especially relevant to understanding cognition in clinical situations.