This study explores whether object relations (OR) functioning improves over the course of psychodynamic psychotherapy, and whether this improvement is related to symptom decrease as well as therapist technique. The sample consisted of 75 outpatients engaged in short‐term psychodynamic psychotherapy at a university‐based psychological service clinic. OR functioning was assessed pre‐ and post‐treatment by independent raters using the Social Cognition and Object Relations Scale from in‐session patient relational narratives. The Comparative Psychotherapy Process Scale was used to assess therapist activity and psychotherapy techniques early in treatment. Independent clinical ratings of global OR and psychotherapy techniques were conducted, and rater agreement was found to be in the excellent range. Regarding the results, global OR (overall quality and level of interpersonal functioning) significantly improved with large effect size after psychodynamic therapy. Change in global OR functioning was significantly and positively related to the incidence of psychodynamic techniques in early sessions, as were number of psychotherapy sessions attended. Patient self‐reported reliable change in symptomatology and reliable change in global OR were significantly related as well. Multilevel model analyses confirmed pairwise correlations accounting for therapist effects on a variety of process–outcome measures, number of sessions attended, initial levels of psychiatric symptoms, employment of therapeutic techniques as well overall OR functioning at outcome. Limitations of the present study, future research directions and implications for clinical practice are also discussed. Copyright © 2016 John Wiley & Sons, Ltd. Key Practitioner Message Psychodynamic psychotherapy seems to be effective in improving object relations functioning. Consider use of psychodynamic techniques early in treatment with patients expressing more pathological object representations. Improvements in object relations functioning during psychodynamic psychotherapy are also related to adaptive changes in patient self‐reported symptomatology. Therapist effects were also present for the study. As such therapists should be mindful to assess patient change and their use of technique at several points in treatment and flexibly adjust their approach as necessary.