Lao Zi was a transformation body of the Venerable Mahākāśyapa. When the Buddha entered the world, he saw that living beings in China committed many offenses and did not conduct themselves in accord with propriety, so he sent Lao Zi, Confucius, and Yan Hui to China to teach and transform living beings. All three were transformation bodies of Bodhisattvas.

Lao Zi introduced the concept of the unconditioned to the Chinese people. If one can understand unconditioned dharma, one can then come to understand that which is not unconditioned. The Buddhadharma speaks of that which is unconditioned and yet not unconditioned.