The concept of interpersonal feedback as one of providing information to a person for improving his interpersonal competence is discussed. After discussing the functions of interpersonal feedback, the processes of interpersonal feedback are discussed in details. The process consists of perception of behaviour by the person giving feedback, his own personality, the message he sends, the way he sends the message, how the message is received, whether it is seen as helpful or threatening and how it leads to either behavioural change or rejection of feedback. The various uses of feedback are discussed, drawing upon various researches in the field. Discussing the various kinds of feedback, the last section focusses on how feedback can be useful for building effective transaction between the person giving feedback and the one who is receiving it. This section also discusses what the person who is giving feedback can do to make it more effective and similarly what the person who receives the feedback can do so that instead of dealing with the feedback by defensive behaviour, he is able to use it for increasing his interpersonal competence.