Chinese theology, which comes in different interpretations according to the Chinese classics and Chinese folk religion, and specifically Confucian, Taoist, and other philosophical formulations, is fundamentally monistic, that is to say it sees the world and the gods of its phenomena as an organic whole, or cosmos, which continuously emerges from a simple principle. This is expressed by the concept that "all things have one and the same principle" (Chinese: 萬物一理; pinyin: wànwù yīlǐ). This principle is commonly referred to as 天; Tiān, a concept generally translated as "Heaven", referring to the northern culmen and starry vault of the skies and its natural laws which regulate earthly phenomena and generate beings as their progenitors. Ancestors are therefore regarded as the equivalent of Heaven within human society, and hence as the means connecting back to Heaven which is the "utmost ancestral father" (曾祖父; zēngzǔfù). Chinese theology may be also called Tiānxué (天學; "study of Heaven"), a term already in use in the 17th and 18th centuries.

The universal principle that gives origin to the world is conceived as transcendent and immanent to creation at the same time. The Chinese idea of the universal God is expressed in different ways; there are many names of God from the various sources of Chinese tradition, reflecting a "hierarchic, multiperspective" observation of the supreme God.

Chinese scholars emphasise that the Chinese tradition contains two facets of the idea of God: one is the personified God of popular devotion, and the other one is the impersonal God of philosophical inquiry. Together, they express an "integrated definition of the monistic world".

Interest in traditional Chinese theology has waxed and waned over the various periods of the history of China. For instance, the Great Leap Forward enacted in the mid-20th century involved the outright destruction of traditional temples in accordance with Maoist ideology. From the 1980s onward, public revivals have taken place. Historically, Chinese theology has espoused that deities or stars are arranged in a "celestial bureaucracy" that influences earthly activities and is reflected by the hierarchy of the Chinese state itself. These beliefs have similarities with broader Asian Shamanism. The alignment of earthly and heavenly forces is upheld through the practice of rites and rituals (Li), for instance, the jiao festivals in which sacrificial offerings of incense and other products are set up by local temples, with participants hoping to renew the perceived alliance between community leaders and the gods.

As explained by the scholar Stephan Feuchtwang, in Chinese cosmology "the universe creates itself out of a primary chaos of material energy" (hundun and qi), organising as the polarity of yin and yang which characterises any thing and life. Creation is therefore a continuous ordering; it is not a creatio ex nihilo. Yin and yang are the invisible and the visible, the receptive and the active, the unshaped and the shaped; they characterise the yearly cycle (winter and summer), the landscape (shady and bright), the sexes (female and male), and even sociopolitical history (disorder and order). The gods themselves are divided into yin forces of contraction, guǐ (鬼; "demons" or "ghosts") and yang forces of expansion shén (神; "gods" or "spirits"); in the human being they are the hun and po (where hun (魂) is yang and po (魄) is yin; respectively, the rational and emotional soul, or the ethereal and the corporeal soul). Together, guishen (鬼神) is another way to define the twofold operation of the God of Heaven, its resulting dynamism being called itself shen, spirit.

By the words of the Neo-Confucian thinker Cheng Yi:

[Heaven] is called ... the gǔi-shén with respect to its operation, the shén with respect to its wonderful functioning.

Another Neo-Confucian, Zhu Xi, says: