Dahui was a student of Yuanwu Keqin (Wade–Giles: Yuan-wu K'o-ch'in; Japanese: Engo Kokugon) (1063–1135) and was the 12th generation of the Linji school of Chan Buddhism.

Recognizing his potential and great intellectual abilities, Zhantang Wenzhun (Zhan Tangzhun) made Dahui his personal attendant.

On his way to Tianning Wanshou, a monastery in the old imperial city of Bian (modern Kaifeng), Dahui vowed to work with Yuanwu for nine years and if he did not achieve enlightenment, or, if Yuanwu turned out to be a false teacher, giving approval too easily, Dahui would give up and turn to writing scriptures or treatises.

Later, he recalled the event: Master Yuan-wu ascended the high seat in the lecture hall at the request of Madame Chang K'ang-kuo (張康國夫人).

A high ranking government official, the Minister of the Right, Lu Shun, gave Dahui a purple robe and the honorific, "Fori", the Sun of the Dharma.

The following year, 1126, the Jürchen Jin dynasty captured the Emperors Huizong and Qinzong; the capital was moved to the south and the Southern Song era began.

It was at this time that he began his severe criticism of the "heretical Chan of silent illumination" of the Caodong school which he would continue for the rest of his life.

He became a great favorite of the educated and literate classes as well as Chan monks and in 1137, at the age of forty-nine, Chancellor Zhang Jun (張浚), a student of Dahui, appointed him abbot of Jingshan monastery in the new capital Lin-an (modern Hangzhou, Zhejiang).

Because of his association with a high official who fell out of favor with the prime minister, all Dahui’s imperial honors and his ordination certificate were stripped from him and he was sent in exile to Hengzhou (Hunan) in the year 1141.

[8] Throughout these difficult years, Dahui continued teaching in the Linji tradition of Chan Buddhism, attracting both gentry and commoners.

Finally, in 1155, Dahui was pardoned and was allowed to return to his former monastery at Jingshan where he continued his teaching until he died five years later on 10 August 1163.

Emperor Xiaozong of Song bestowed upon him the posthumous title "Chan Master of Great Wisdom," from which the name Dahui derives.

[9] The enlightenment experience as the answer to the riddle of life and death, and the great doubt necessary to have the determination to break through, became central to Dahui’s teaching.

Gong-ans developed during the Tang dynasty (618–907)[10] from the recorded sayings collections of Chán-masters, which quoted many stories of "a famous past Chán figure's encounter with disciples or other interlocutors and then offering his own comment on it".

In a radical move to counter this literary emphasis, he even ordered the suppression of his own teacher’s masterly collection of koans, The Blue Cliff Record (Wade–Giles: Pi Yen Lu; Pinyin: Bìyán Lù; Japanese: Hekiganroku), burning all copies and the wooden blocks to print them, effectively taking the venerated text out of circulation for the next two centuries.

This use of written comments and poetry shows the influence of Chinese literati culture, to which both state officials and most Buddhist higher clergy belonged.

[19]Dahui often used the famous mu-koan, "A monk asked Zhàozhōu, ‘Does a dog have Buddha-nature or does it not have Buddha-nature?’ Zhàozhōu replied, ‘wu’ (Chinese; Japanese: Mu), "no," "not" (which later became the 18th koan in the collection The Book of Equanimity published 61 years after his death in 1224 and then appearing again as the first koan in The Gateless Gate published 4 years later in 1228).

[20]According to Poceski, although Dahui's kanhua Chan purports to be a sudden method, it essentially consists of a process of gradually perfecting concentration.

Dahui exerted a strong influence on the Japanese Rinzai teacher Hakuin Ekaku, who also taught great doubt as necessary to awaken.

He labeled teachers of this type of meditation practice as "heretical" and complained, They just sit in a ghostly cave on a dark mountain after their meals.

Only one work can be attributed to Dahui, a collection of koans entitled Zhengfa Yanzang 正法眼藏[25] (The Storehouse of the True Dharma Eye, J. Shobogenzo)[a] Dahui also compiled the Chánlín Bǎo Xùn (禪林寶訓, "Treasured Teachings of the Chan Monastic Tradition"), instructions of former Chan abbots about the virtues and ideals of monastic life, in collaboration with another monk, Dagui.