This chapter takes a close look at the conceptualization of parasocial interaction (PSI), that is, users’ illusionary experience, during media exposure, of being in a reciprocal social interaction with a media performer (while objectively this is not the case). The chapter discusses existing conceptual challenges and boundary conditions and proposes future research avenues. A review of PSI theory reveals that a performer’s anticipated user response and implicit forms of address have been neglected in empirical research to date. The biggest conceptual challenge to the PSI concept, however, poses the “interactivity problem.” Do user interactions with online performers (influencers, streamers, etc.) and other characters in (at least partially) interactive settings still qualify as PSI? The chapter proposes that the concept can still be applied under certain conditions. PSI can be germane to interactive modalities if an individual user (a) feels like being in a reciprocal interaction with the performer; (b) feels like being directly personally addressed by the performer; and (c) feels as if the interaction is reciprocally intimate—while it can be demonstrated that these three qualities are objectively not true.