There is currently no consensus on how to study psychological situations, and situation research is still riddled with problems of conceptualization (what is a situation and what is it not?) and measurement (how can situational information be assessed?). This target article formulates three core principles (with corollaries) to provide a foundation for psychological situation research: the Processing, Reality and Circularity Principles. These principles build upon each other, ranging from basic to more complex issues (e.g. how to study situations in both objective and subjective terms). They are intended to guide and spur more coherent research programs that produce cumulative knowledge on psychological situations. We conclude with a plea for real‐life, multi‐method, multi‐situation, multi‐time, multi‐group designs that can illuminate the interwoven dynamics between persons (with their personalities and behaviour) and situations. Copyright © 2015 European Association of Personality Psychology