Despite its significance, the teacher-student relationship in higher education remains an under-researched field. The current study used constructivist grounded theory, in order to enrich the relevant discussion. More specifically, it aimed at exploring how the teacher-student relationship in graduate education develops (and gradually evolves) based on the perceptions and experiences of the parties involved. Data was collected through intensive interviewing with twenty teacher educators and by five focus groups with twenty-five graduate students in Educational Sciences. Based on the combined constant comparative analysis of the teachers' and students' perceptions and experiences, the teacher-student relationship in higher education surfaced as a complex dynamic process. Despite the teachers' hierarchical superiority, it is characterised by reciprocating in all its manifestations: mutually wanting to relate, developing characteristics of a meaningful relationship, overcoming obstacles, maintaining boundaries and experiencing the positive outcomes.