Emmanuel Levinas’ ethical phenomenology offers a new understanding of what constitutes the core issue of ethics. For Levinas, the word “ethics” becomes a question about the “wholly Other,” the entity that challenges the self-qua-being, thus diverging from the traditional ontological framework of Being in the West, that is, sameness or totality. At first glance, Zhuangzi seems to have little in common with Levinas: The former irreverently mocks all moral principles and ethical norms whereas the latter takes ethics as first philosophy; the former speaks of the faceless as the model of Daoist authenticity whereas the latter speaks of the face as the symbol of moral obligation. Nevertheless, there are plenty of chapters in the Zhuangzi which illustrate how a self-being experiences a profound transfiguration through its encounter with the Other, a constellation which resonates with Levinas’ theme. In this paper, the issue of relationality in the Zhuangzi will be analyzed in light of Levinas’ espousal of alterity, with the purpose of explicating the Daoist appropriation of what I will call “the philosophy of difference.” I will submit the argument that the Zhuangzian notion of freedom and the Daoist conception of a well-lived life are both based upon this philosophy of difference. I will also argue that Daoist ethics, particularly the version expressed by the Zhuangzi, is best understood as a form of “negative ethics.”