In some Taoist sects, Zhang, along with Ge Xuan, Xu Xun (许逊) and Sa Shoujian (萨守坚), are called the "Four Celestial Masters" (四大天師).

the deity Taishang Laojun (a deified Laozi) revealed to Zhang on Mount Heming the "Doctrine of the Orthodox One [Resting On] the Authority of the Alliance" (pinyin: zhengyi mengwei dao), and bestowed upon him the title Celestial Master.

He founded a theocratic state in Sichuan organized into 24 parishes, later 28, which outsiders called the Way of Five Pecks of Rice, after a tax of that amount levied on followers.

According to Zhang, the updated teachings of Laozi included the first true Taoist religious pantheon as distinguished from the prior ancient religion of China.

[citation needed] The Xiang'er, a commentary on the Tao Te Ching preserved today in a sixth-century manuscript, is traditionally ascribed to Zhang Daoling's authorship and even if not his work may reflect his teachings.