The philosophical origins of Chinese medicine have grown out of the tenets of Daoism (also known as Taoism). Daoism bases much of its thinking on observing the natural world and manner in which it operates, so it is no surprise to find that the Chinese medical system draws extensively on natural metaphors. The direct meanings of yin and yang in Chinese are bright and dark sides of an object. Chinese philosophy uses yin and yang to represent a wider range of opposite properties in the universe: cold and hot, slow and fast, still and moving, masculine and feminine, lower and upper, etc. In general, anything that is moving, ascending, bright, progressing, hyperactive, including functional disease of the body, pertains to yang. The characteristics of stillness, descending, darkness, degeneration, hypo-activity, including organic disease, pertain to yin.

The function of yin and yang is guided by the law of unity of the opposites. In other words, yin and yang are in conflict but at the same time mutually dependent. The nature of yin and yang is relative, with neither being able to exist in isolation. Without "cold" there would be no "hot"; without "moving" there would be no "still"; without "dark", there would be no "light". The most illustrative example of yin-yang interdependence is the interrelationship between substance and function. Only with ample substance can the human body function in a healthy way; and only when the functional processes are in good condition, can the essential substances be appropriately refreshed.

The opposites in all objects and phenomena are in constant motion and change: The gain, growth and advance of the one mean the loss, decline and retreat of the other. For example, day is yang and night is yin, but morning is understood as being yang within yang, afternoon is yin within yang, evening before midnight is yin within yin and the time after midnight is yang within yin. The seed (Yin) grows into the plan (Yang), which itself dies back to the earth (Yin). This takes place within the changes of the seasons. Winter (Yin) transforms through the Spring into Summer (Yang), which in turn transforms through Autumn into Winter again. Because natural phenomena are balanced in the constant flux of alternating yin and yang, the change and transformation of yin-yang has been taken as a universal law.

Traditional Chinese medicine holds that human life is a physiological process in constant motion and change. Under normal conditions, the waxing and waning of yin and yang are kept within certain bounds, reflecting a dynamic equilibrium of the physiological processes. When the balance is broken, disease occurs. Typical cases of disease-related imbalance include excess of yin, excess of yang, deficiency of yin, and deficiency of yang.