Serving as the royal archivist for the Zhou court at Wangcheng (modern Luoyang), he met and impressed Confucius (c. 551 – c. 479 BC) on one occasion, composing the Tao Te Ching in a single session before retiring into the western wilderness.

He was claimed and revered as the ancestor of the Tang dynasty (618–907) and is similarly honored in modern China as the progenitor of the popular surname Li.

In the 20th century, textual criticism by historians led to theories questioning Laozi's timing or even existence, positing that the received text of the Tao Te Ching was not composed until the Warring States period (c. 475 – 221 BC), and was the product of multiple authors.

[4] Traditional accounts give Laozi the personal name Li Er (李耳, Lǐ Ěr), whose Old Chinese pronunciation has been reconstructed as *C.rəʔ C.nəʔ.

[9] Laozi is recorded bearing the courtesy name Boyang (伯陽, Bóyáng), whose Old Chinese pronunciation has been reconstructed as *pˤrak laŋ.

[11] By the mid-twentieth century, consensus had emerged among Western scholars that the historicity of a person known as Laozi is doubtful and that the Tao Te Ching is "a compilation of Taoist sayings by many hands",[12][13] with an author being invented afterwards.

These are mixed in with passages not carried by the transmitted Tao Te Ching, indicating that its makeup was still undergoing revisions and modifications.

[18] The oldest manuscripts of the Tao Te Ching in a complete form by itself were discovered at a tomb in Mawangdui, and date to the early 2nd century BCE.

[19] Analysis of early commentary on passages that appear in the received Tao Te Ching supports an accretionary evolution for the text rather than a singular authorship event.

This reportedly allowed him broad access to the works of the Yellow Emperor and other classics of the time, and wrote a book in two parts before departing to the west.

In another, Laozi was a different contemporary of Confucius called Lao Laizi [zh] (老莱子), one of the Twenty-four Filial Exemplars, and wrote a book in 15 parts.

In a third, he was the court astrologer Lao Dan who lived during the 4th century BC reign of the Duke Xian of Qin[24][25] who grew weary of the moral decay of life in Chengzhou and noted the kingdom's decline.

[27][28] The stories assert that Laozi never opened a formal school but nonetheless attracted a large number of students and loyal disciples.

[27][29] A.C. Graham suggested that the Confucian version of the story presented in the Book of Rites was the original, which was borrowed and re-interpreted by the followers of Zhuang Zhou.

[34] Unlike most works of its genre, the book conspicuously lacks a central "master" character and seldom references historical people or events, giving it an air of timelessness.

Tao Te Ching used the term broadly with simplicity and humility as key virtues, often in contrast to selfish action.

Some Taoists see a connection between wu wei and esoteric practices, such as zuowang ('sitting in oblivion': emptying the mind of bodily awareness and thought) found in the Zhuangzi.

However, some terms in the text, such as "valley spirit" (谷神, gǔshén) and 'soul' (魄, pò), bear a metaphysical context and cannot be easily reconciled with a purely ethical reading of the work.

[39] Political theorists influenced by Laozi have advocated humility in leadership and a restrained approach to statecraft, either for ethical and pacifist reasons, or for tactical ends.

Belief in the revelation of the Tao from the divine Laozi resulted in the formation of the Way of the Celestial Masters, the first organized religious Taoist sect.

[54] James A. Dorn agreed, writing that Laozi, like many 18th-century liberals, "argued that minimizing the role of government and letting individuals develop spontaneously would best achieve social and economic harmony.

"[55] Similarly, the Cato Institute's David Boaz includes passages from the Tao Te Ching in his 1997 book The Libertarian Reader and noted in an article for the Encyclopædia Britannica that Laozi advocated for rulers to "do nothing" because "without law or compulsion, men would dwell in harmony.

[60] More recently, anarchists such as John P. Clark and Ursula K. Le Guin have written about the conjunction between anarchism and Taoism in various ways, highlighting the teachings of Laozi in particular.

[61] In her rendition of the Tao Te Ching, Le Guin writes that Laozi "does not see political power as magic.