Buddhism originated from the teachings of Gautama Buddha, a prince who relinquished palace life for a life of meditation and spiritual upliftment. He emphasised "dharma", or right conduct, and organised monks and nuns into monasteries called "sanghas". The philosophy of Buddhism is to take the Middle Path, avoiding the extremes of getting addicted to worldly pleasures and subjecting oneself to unnecessary rigours. It rejects the idea of God, and stresses on moral progress independent of any God or Godlike figure. It questions the idea of a permanent or immortal soul, but accepts the idea of transmigration of souls.

The most important principle of Buddhism is that of the Four Noble Truths: only suffering exists; it is caused by desire; suffering can cease; and there does exist a path to 'nirvana' or cessation of suffering. There is also the Noble Eightfold Path, which consists of: Right resolve, Right speech, Right conduct, Right livelihood, Right effort, Right mindfulness and Right concentration.

Later, Buddhism split into two sects: Mahayana and Hinayana (Theravada). Mahayana stresses on the concept of the Bodhisatta or "one destined to be the Buddha" and also conceives of Eternal Buddhas who resemble gods or deities. Hinayana regards Buddha as a man with a doctrine, Theravada stressing the salvation of the individual. Later, the interaction of Mahayana philosophy and Hinduism gave rise to Tantric Buddhism or Vajrayana.

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