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Eric was born on May 10, 1910 as Eric Lennard Bernstein in Montreal, Canada. He and his sister Grace, who was five years younger than Eric, were the children of a physician and a writer, David and Sara Gordon Bernstein. David Bernstein died in 1921, and the children were raised by their mother.

Bernstein attended McGill University, graduating in 1931 and earning an M.D. in 1935. While at McGill he wrote for several student newspapers using pseudonyms. He followed graduation with a residency in psychiatry at Yale, where he studied psychoanalysis under Dr. Paul Federn. He completed his training in 1938 and became an American citizen in 1939.

In 1943 he changed his legal name to Eric Berne. He continued to use pseudonyms, such as Cyprian St. Cyr ("Cyprian Sincere"), for whimsical articles in the Transactional Analysis Bulletin.
Berne's training was interrupted by World War II and his service in the Army Medical Corps. After working at Bushnell Army Hospital in Ogden, Utah, he was discharged in 1945.

Eric Berne wrote eight major books in his lifetime:
  • The Mind in Action (1947);
  • A Layman's Guide to Psychiatry and Psychoanalysis (1957);
  • Transactional Analysis in Psychotherapy (1961);
  • Structure and Dynamics of Organizations and Groups (1963);
  • Games People Play (1964);
  • Principles Group Treatment (1966);
  • Sex in Human Loving (1970); and
  • What Do You Say After You Say Hello (1971).