The Fa-hsiang school is the Chinese continuation of the Indian Yogacara(or Vijnanavada). Fa-hsiang literally means "Characteristic of Dharma". It refers to the central notion of the school, which states that everything is only ideation. This means that the external world is only the product of our consciousness and possesses no reality, they are of the nature of pure Consciousness (vijnana), "consciousness-only" (vijnanamatrata, vijnaptimatrata), or "Mind-only" (Chittamatra). The school thus is referred to as the school of "Mind-only".

The Indian Yogachara was founded by two brothers, Asanga and Vasubandu, native of North-West India, in the 4th or 5th century. The Asanga and Vasubandu were encyclopaedic systematisers, who developed ideas already established in older writings, such as the Abhidharma, the Prajnaparamita, and the Lankavatara, and gave definitive form to earlier Mahayanist concepts and the theory that reality is consciousness-only.

The most important book of the school is the Vijnaptimatrata-siddhi (Chin., Cheng-wei-shih-lun, proof of Nothing-but-Cognition) by Hsuan-tsang, a compendious work in which the teaching of the school is presented in detail. The Sandhinirmochana and Lankavatara sutras are also influential in the formulation of the doctrines of Fa-hsiang.

The special characteristics of this school are its emphasis on meditation and a broadly psychological analysis. Fa-hsiang developed a teaching on eight types of consciousness in order to explain the process of ideation (alaya-vijnana). The common view that external things exist is due to an error or misconception that is removable through a meditative process that brings a complete withdrawal or “revulsion” from these fictitious externals and an inner concentration and tranquillity through Yoga practice.

Fa-hsiang reduces all of existence to 100 (=8+51+11+24+6) dharmas, which are further divided into five categories:

(1). Primary consciousness (vijnana): 8 mental dharmas (cittadharma), comprising

• visual consciousness (eye)
• auditory consciousness (ear)
• olfactory consciousness (nose)
• gustatory consciousness (tongue)
• tactile consciousness (body)
• mano-vijnana, the thinking consciousness that coordinates the perceptions of the sense organs (cognition)
• manas-vijnana, the self-conscious defiled mind, which thinks, wills, and is the principal factor in the generation of subjectivity (cognitive faculty)
• alaya-vijnana, the storehouse consciousness

(2). Attendant mental factors (chetasika): 51 mental functions or capacities, dispositions, and activities (caitasika-dharma).

(3). Form (rupa): 11 elements concerned with material forms or appearances (rupa-dharma).

(4). Dharmas independent of mind: 24 things, situations, and processes not associated with the mind--e.g., time, becoming (cittaviprayuktasmskara)

(5). Unconditioned (asamskrita) dharmas: 6 non-created or nonconditioned elements (asamskrta-dharma)--e.g., emptiness or "true suchness"(tathata).

The storehouse consciousness is postulated as a receptacle of the imprint of thoughts and deeds, the vasana (literally “perfuming”) of various karmic seeds (bijas). The seeds develop into touch, mental activity, feeling, perception, and will, corresponding to the five skandhas. Then ideation (manas) develops.

The process of purifying the subject-object duality and notions of false existence and restored to the pure state of the storehouse consciousness is the only means, according to this school, to achieve the Buddhahood or the undifferentiated state. To address the process in detail, three modes (svabhava) are introduced:

1. Parikalpita-svabhava (Chinese, Pen-Ji-Shuo-Shi-Shin): the mere fictions of false imagination. Which believes all dharmas are real.
2. Paratantra-svabhava (Chinese, I-Ta-Chie-Shin): the related existence of things, under certain conditions or aspects. It is called dependent rising, means all things are collections of parts with certain condition and all the parts are not real, therefore the thing itself is not true either.
3. Parinispanna-svabhava (Chinese, Wuene-Chin-She-Shin): the perfect mode being corresponding to right knowledge. It is the “true suchness” itself.

Fully understand the above threefold version of the modes is the correct path to transform consciousness to wisdom. Four types of wisdom can be obtained if the eight primary consciousness(es) (vijnana) can be practiced properly, they are:

1. The wisdom of accomplishing activities: wisdom of purifying normal external activities, purposes and so forth. It can be achieved by proper transformation of the first five consciousness(es) to this wisdom.
2. The wisdom of individual analysis: wisdom of analyzing different objects or identifying the different characters from the same object. It can be achieved by proper transformation of the mano-vijnana to this wisdom
3. The wisdom of equality: wisdom of treating experiences such as having been pleasurable, painful and neutral equally. It can be achieved by proper transformation of the manas-vijnana to this wisdom.
4. The grand-round-mirror-like wisdom: like mirror can reflect many objects simultaneously, the wisdom can perceive many objects accurately and simultaneously. It can be achieved by proper transformation of the alaya-vijnana to this wisdom. It is the state of the Buddhahood.

These four wisdoms lead the practitioners to four Nirvana:

1. Nirvana with residue: realizes the nature of Nirvana but not yet eliminate the five aggregates (form, feeling, discernment, compositional factors and consciousness).
2. Nirvana without residue: the aggregates have been eliminated.
3. Svabhava Nirvana: realizes the Primeval Nirvana is always existing.
4. Nonabiding Nirvana: abides in neither Samsara nor ulitmate quiescence. The Nirvana of the highest Bodhisattvas.

The forth Nirvana transform the normal body of practitioner into three ultimate Buddha bodies. They are:

1. Dharma-kaya: the true body.
2. Sambhoga- kaya: the enjoyment body.
3. Nirmana- kaya: emanation body.