200 years after the parinibbana of the Buddha (~286 B.C.) an elder called Vatsiputra prepared a new recession of the Abhidhamma in 9 sections which he claimed to have received from Sariputra and Rahula. The Sthaviravada school divided over the question whether this concept, the "person" should be considered as a real principle among those listed in the Abhidhamma or whether it is merely a word used in conventional language, like "self' or "soul" or "being". Vatsiputra later formulated his special doctrine about the "person" (pudgala). The followers were called the Vatsiputriyas after Vatsiputra.

According to Abhidhamma, the Buddha uses the word in some of his discourses as he uses "being" in others. The question was whether He was just using everyday language in speaking to hearers who would not understand a philosophical statement or whether he assumed any sort of reality apart from the groups senses and mental principles counted in the Abhidhamma. The Vatsiputriyas advocated the theory of the 'pudgala', the permanent substance of an individual. The pudgala was neither the same as nor different from the skandhas. Like the Sarvastivadins, they believed that an arhat could fall and that heretics could also attain miraculous powers. They also believed in antara-bhava.

Like all Buddhists the Vatsiputriyas rejected the Brahmanical concept of an eternal soul, on the other hand, they rejected the orthodox Sthaviravada theory (which is also that of all other schools of Buddhism) that a living being is nothing but the five groups with the senses. However they found it difficult to define what a "person" could be, as a subject which continued and transmigrated. They in fact decided that it could not be said what it was, like the undetermined questions to which there was no answer.

The original Vatsiputriyas seem to have remained in the East, settling in Kosala, Varanasi and being (as were the Sammitiyas) one of the early schools which still flourished in the homeland of Buddhism in the time of the Pala Empire (8 - 12^th centuries A.D.).

After Vatsiputra had given his school the Abhidhamma in nine sections, his followers set to develop this further by studying the Sutra. The result of these studies was the production of no less than 4 new schools. In later centuries, the main centers of these schools seem to have been in Western Maharastra, Gujarat and Sindhu. The only treatise that is now existing is the Chinese translation of the Asrayaprajnaptisastra (or Sammitiyasastra), no other texts of any of these four schools or of the Vatsiputriya itself appears to have survived. The four schools were: