“How is the meaning of the Dao to be understood?” To answer this question, we should not make indiscreet remarks outside of the framework of Laozi’s thought; rather, we should enter the system, helping Laozi to establish a philosophical system on the Dao. Such an establishment is equivalent to that of a logical system of Laozi’s philosophy. We consider the presentation of Laozi’s thought as unverified propositions, and the purpose of this essay is to expound on these propositions and make them philosophy in a strict sense: The Dao that can be talked about is not Dao anymore, and while “the Dao” seems to have its name, it actually does not. Names are also particular things. The Dao is neither a name nor a thing; instead, the Dao implies nonexistence. Nonexistence means the possibility of the being of all things, and all these things are the manifestation of the Dao, thus nonexistence is also existence. Things are discriminated from the Dao, and because all these things are discriminated from each other, there is de 德 (virtues). Where the discrimination is removed, there is the Dao, and adherence to the discrimination means deviation from the Dao. The diversity of things stirs up desires, and the control and utilization of things are a departure from the Dao. Only desires without self are compatible with nature. Desire discriminates with artificial measurements, and thus leads to knowledge. To acquire knowledge is to learn, and learning develops the capability to differentiate between the self and the other, so only a decline in learning can be conducive to human life. One can achieve something, transform external things and withstand nature only after he learns and acquires knowledge. On the other hand, wuwei 无为 (doing nothing) leads to wuwo 无我 (self-denial), avoiding the invention or differentiation of things. So, life is just the movement of the Dao, in which all things are allowed to take their own courses and nothing is left unaccomplished.