Interaction between two people may be construed as a continuous process of perception and action within the dyad. A theoretical framework is proposed in this article that explains the concepts and processes which comprise the interaction process. The article explores the transactional nature of interaction, through analysis of narrative data from two dyads, each comprising a person with severe or profound intellectual and multiple disability and a service worker. The novel application of grounded theory to analyse video data of non-verbal communication data in order to develop the theoretical framework is reviewed. Previously, attuning has been identified as the key process that drives interaction. This article explores the other concepts of the theory proposed, namely, setting, being, stimulus, action, attention and engagement. The article concludes by contrasting this theory of the interaction process with other related concepts and suggests how application of the proposed framework may enhance practice. [For the companion article, "Attuning: A Communication Process between People with Severe and Profound Intellectual Disability and Their Interaction Partners," see EJ1089994.]