Taoism, alongside Confucianism, is one of the two pillars of classical Chinese thought. Its source text, the Tao Te Ching ('Book of the Way and Its Power'), is traditionally attributed to a sage called Laozi. According to Sima Qian's 1st-century-BCE Shiji, Laozi was a contemporary of Confucius and keeper of the Zhou royal archives; when society decayed he withdrew westward on a water buffalo, and at the final frontier pass he left this five-thousand-character book with the gatekeeper and vanished.

Modern philology shows the story is largely legendary and that the text was likely compiled by multiple hands in the 4th and 3rd centuries BCE. But the silk manuscripts excavated in 1973 from the Mawangdui tombs prove that the core form of the book was fixed by 200 BCE at the latest.

The central concept of the Tao Te Ching is 'tao' — the way, the flow, the working of the universe — a substance not fully captured in words: 'The tao that can be spoken is not the true tao.' The way to align with it is wu-wei, 'effortless action': following nature's grain rather than fighting it. This is not passivity but being in the right place at the right time. What is hard breaks; what is yielding endures; water, the softest substance, wears down the hardest rock.

Philosophical Taoism (Daojia) was joined in the 2nd century CE by religious Taoism (Daojiao): gods, rituals, alchemy, and the quest for immortality. The two branches should not be conflated. Taoism gave Chinese painting its landscape tradition, Chinese medicine its meridian and qi concepts, Chinese literature a register of paradox and intuition; it prepared the soft reception of Buddhism in China and left indirect traces in 20th-century Western thought from Heidegger to ecological ethics.