Is a more empathic therapist more effective? Classic clinical models rightfully describe empathy as an important clinical tool, but emerging evidence indicates that it can interfere with some therapeutic goals. Here, we provide a contemporary framework that addresses this tension. We propose a model in which empathic and emotion regulatory processes combine to create a “therapeutic emotional circuit” in which emotions flow from therapist to client and back again via empathy. Therapists can use empathy regulation to modulate this emotional flow to achieve specific goals for both their own and their clients’ emotional experiences. We then illustrate how optimal empathy regulation diverges across two empirically supported interventions: to best support clients, exposure therapy requires down-regulating affect sharing whereas motivational interviewing requiring up-regulating this empathic process. This model challenges classic intuition, revealing new directions for clinical research, training, and practice.