Literally meaning 'great seal', the term Mahamudra is defined according to either the sutra or tantra classes of teachings. According to the sutra explanation, Mahamudra refers to the comprehension of emptiness as the all-encompassing ultimate nature of reality. Emptiness is called the great seal, in this context, for it is posited that nothing extraneous to it exists, and all phenomena, both physical and mental, are in their ultimate natures empty of inherent existence.

According to the explanation of the tantras in general, Mahamudra refers to the state of buddhahood, the conclusive result or supreme accomplishment. It is called 'mudra' because the realization of the three kayas is sealed in the accomplishment of supreme unchanging bliss. With respect to this attainment, there is neither increase nor decrease and, on account of its atemporal nature, it endures as long as space endures. It is called 'great' because the three greatnesses of the Mahayana - renunciation, realization and mental cultivation - are fully ripened. In Mahayoga, Mahamudra refers to the great seal of buddha-body which secures the consciousness of the ground-of-all (alayaviinana) as the mirror-like pristine cognition. Mahamudra practice may also be considered in terms of ground, path and result.

As a path, it comprises a sequence of systematic advanced meditations on emptiness and pure appearance. This meditative approach applies both calm abiding and penetrative insight whilst focusing on the nature of the meditator's own mind. This type of meditation is popular in both the Kagyu and Gelug schools.

Mahamudra has sometimes been called "Tibetan Zen".