The founder of Taoism is believed by many to be Lao-Tse (604-531 BCE), a contemporary of Confucius. (Alternate spellings: Lao Tze, Lao Tsu, Lao Tzu, Laozi, Laotze, etc.). He was searching for a way that would avoid the constant feudal warfare and other conflicts that disrupted society during his lifetime. The result was his book: Tao-te-Ching (a.k.a. Daodejing). Others believe that he is a mythical character.

Taoism started as a combination of psychology and philosophy but evolved into a religious faith in 440 CE when it was adopted as a state religion. At that time Lao-Tse became popularly venerated as a deity. Taoism, along with Buddhism and Confucianism, became one of the three great religions of China. With the end of the Ch'ing Dynasty in 1911, state support for Taoism ended. Much of the Taoist heritage was destroyed during the next period of warlordism. After the Communist victory in 1949, religious freedom was severely restricted. During the cultural revolution in China from 1966 to 1976, much of the remaining Taoist heritage was destroyed. Some religious tolerance has been restored under Deng Xiao-ping from 1982 to the present time.