Philosophical mysticism reaches its culmination in an especially elaborate literature of the Agama type of esotericism, known as the Yoga-Vasishtha. It is a book of thirty-two thousand verses divided into six parts designated as Vairagya, or Renunciation; Mumukshutva, or Aspiration for Liberation; Utpatti, or Creation; Sthiti, or Preservation; Upasama, or Dissolution; and Nirvana, or Salvation. The method of teaching adopted by the text is story, anecdote, illustration and image, which it considers as a better way of instruction than logical argument or reasoning.

The teaching emphasises that when there is perception of an object by the seer or observer, there has to be presupposed the existence of a consciousness between the subject and the object. If this conscious connecting link were not to be, there would be no perception of existence. There cannot be a consciousness of relation between two things unless there is a consciousness relating the two terms and yet standing above them. The study of the perceptional situation discloses the fact that the subject and the object are phases of a universal consciousness.

Creation is twofold - objective and subjective. The objective side of creation consists in the world created by Brahma, or the Original Will that projected the substance of the world as well as everything contained in it. The subjective world is the nature of the object as conceived by the mind of the perceiver, differing according to the species of the individual perceiving, such as the celestial, human, etc., and the inner constitution of the mind itself, and the different pressures and moods such as love and hatred, or like and dislike. The Yoga-Vasishtha accepts that there is 'externally' something in the form of the creation of Brahma, though the way of experience of this objective world by the individuals is limited and conditioned by their own psychic structures and modifications.

Ultimately, even the world of Brahma is relative and does not have absolute existence by itself, since space and time do not have any absolute meaning, being relative to the standpoints of the observing individual. Inasmuch as there can be infinite points-of-view of a conscious envisagement of the world by the experiencing individuals, there can be an infinite number of worlds, one penetrating through the other and yet none being affected by the existence of the other. The relativity of space and time makes distance or measurement in terms of three dimensions as well as duration of time relative to the state of consciousness wherein they are experienced. A large universe can be within a particle of sand and aeons can pass within the fraction of a minute. Past, present and future have no relevance by themselves, but are interchangeable according to the nature of their relative structure, so that one can be, the other also under different conditions of consciousness. These astounding facts regarding the inner structure of the universe are propounded through illustrative stories. Space is the relation of the co-existence of ideas and Time is the relation of the succession of ideas. Since existence and succession are themselves ideas, the world has no existence independent of the mind. Though the Yoga-Vasishtha, in its mental theory of the creation of the world, may appear to land one in the doctrine of extreme subjectivism, this predicament is avoided by a simultaneous pronouncement that the individual mind is essentially inseparable from the Cosmic Mind. The relativity of the cosmos is in the end capable of being traced to the working of the Cosmic Mind itself, Brahma dreaming the world, as it were. The universe is regarded as a cosmic dream distinguishable from the individual dreams only by way of the length of their duration. But even this difference in length is just a relative concept, as can be observed in the long years through which one can live in a dream though the dream lasted for only a few minutes from the standard of the waking consciousness. As the dream world vanishes in waking, the waking world vanishes in the experience of the Absolute.

The relativity of the cosmos implies the existence of worlds within worlds and worlds interpenetrating one another without the one necessarily being conscious of the existence of the other. The different worlds are constituted differently. Some of them may be almost similar in their nature, but mostly they differ and may be inhabited by different kinds of individuals ranging from the highest gods down to the lowest denizens of the nether regions. The evolution of the world goes on due to the impetus it has received from the mind of Brahma, and the process of creation continues secondarily even through the individuals.

It is impossible to correctly describe the nature of Reality, for all descriptions are determinations into form, and all such determinations mean the creation of separation or duality which does not obtain in It. In every definition of the Absolute, Brahman, it is falsely objectified or externalised into an 'other' to the knowing consciousness. There is, thus, no such thing as 'knowing' the Absolute in the sense of anything that the relative mind can conceive. Brahman is undifferentiated existence, consciousness, bliss. Though it is everywhere, it cannot be seen, as it is not an object. It exists as the essential Seer, or the Self, in everything.

There are seven stages by which the spiritual seeker rises progressively. The first one is Subheccha, or the good intention to pursue the right path of knowledge and virtue. The second is Vicharana, or an investigation into the ways and means of acquiring true knowledge. The third is Tanumanasi, or the attenuation of the mind due to the subtlety attained by it in the practice of deep concentration. The fourth is Sattvapatti, or the realisation of spiritual equilibrium wherein the light of Brahman splashes forth like lightning in one's experience. The fifth is Asamsakti; or non-attachment to anything that is external on account of attaining the vision of universality. The sixth is Padartha-Abhavana, or the non-perception of materiality and the perception of radiance filling the whole universe, as if the entire existence is lit up with endless light. The seventh is Turiya, or the ultimate state of experience of identity with the Absolute.

The last of the stages mentioned is one of actual realisation and is known as Jivanmukti, that is, liberation while living. When the body drops, one attains Videhamukti, or disembodied salvation. The liberated sage is a master and a Superman. His actions are universal (Mahakarta), his enjoyments are universal (Mahabhokta), and his renunciation, too, is universal (Mahatyagi).

Spiritual practice consists mainly in three processes: (1) The affirmation of the universality of Brahman in one's own consciousness, thinking only of That, speaking only about That, discoursing among one another only on That, and depending on That alone, known as Brahma-Abhyasa; (2) The restraint of the mind by eliminating its desires one by one gradually, adopting as many ways as would be necessary in accordance with the nature of the desires, known as Mano-Nigraha; and (3) The restraint of the Prana. by the well-known method of Pranayama, called Prana-Nirodha. The Prana, the mind and the spirit form the degrees of ascent as well as descent and one can start the practice from above downwards or from below upwards, according to one's temperament and predominating inclination. The most potent way, however, is Brahma-Abhyasa, which is the affirmation of Brahman in life, continuously, at all times, and in all conditions, as one's sole occupation, purpose and duty. This is the principal method of meditation, which restrains the mind and the Prana simultaneously. The Yoga-Vasishtha abounds in a large number of illustrative stories which bring out vividly its philosophical position and its practical suggestions.