He was an 11th-generation master of one of the northern branches of the Longmen 龍門 (Dragon Gate) lineage, and the author of a large number of works that illustrate his views on both Taoism and Neidan.

In 1766 he resumed traveling, and around 1768 he met the Xianliu zhangren 遇仙留丈 (Great Man Who Rests in Immortality), who became his main master.

In early 1779 (possibly, in late 1778), he visited Mount Qiyun 棲雲山 in Jincheng 金城 (present-day Yuzhong, Gansu) and settled there.

His abode, called Zizai wo 自在窩 (Nest of Being by Oneself), is still extant in the present day (Sun Yongle 2011:304; Baldrian-Hussein 2008:691).

Far from living as a solitary recluse (as is sometimes stated), he soon began to leave his mark on the mountain, raising funds from an extended network of benefactors (shanren 善人) in order to restore temples, shrines, and other buildings; to buy and lease fields to poor farmers; and to provide burial ground to those who could not afford it.

In 1821, on the 6th day of the 1st lunar month, Liu Yiming entered the grave, pronounced his final words to his disciples, and died (Sun Yongle 2011:308).

The main collection of Liu Yiming's works is entitled Daoshu shi'er zhong 道書十二種 (Twelve Books on the Dao; Pregadio 2008:331-33).

His best-known works—all found in this collection—consist of commentaries to Neidan texts and of independent works on Neidan, including the following: In addition, Liu Yiming wrote: This summary of Liu Yiming's views on Taoism and Internal Alchemy is mainly based on the Xiuzhen houbian (Further Discriminations in Cultivating Reality; English trans.

This is a major aspect of Neidan (Internal Alchemy) itself, whose masters frequently draw concepts and terms from different traditions if this serves to express their point.

The distinction between the "precelestial" (xiantian 先天) and the "postcelestial" (houtian 後天) domains (before and after the generation of the cosmos, respectively) is essential in Liu Yiming's discourse on Taoism and Internal Alchemy.

The Elixir, therefore, consists in the conjunction of the precelestial and the postcelestial, and grants access to the higher state of non-duality, or True Unity.

The gradual process of Neidan provides a means for "inverting the course" (ni 逆), making it possible first to "return to one's destiny," and then to "see one's Nature."

The dharma-body (a term that in Buddhism means the awakened "body" of the Buddha; see Trikaya) has "no head and no tail, no front and no back; it stands at the center and does not slant" (id.).

This requires receiving the instructions of a master, but the method (fa 法) ultimately consists in following the Tao itself: there is no need to "do" a practice, and one operates by "non-doing" (wuwei 無為).

In parallel to the distinction between superior and inferior virtue, Liu Yiming also establishes a key difference between two aspects, or stages, of the Internal Elixir.

Thus Internal Alchemy, through its gradual process, enables one to ascend to the precelestial, but its practice is concluded when the descent to the postcelestial is also performed.