In the early years of his Christian life, Watchman Nee came to see that man is composed of three parts: spirit, soul, and body (1 Thes. 5:23). He came to see that the soul is the personality of man; the body is the outward part of man for contacting the physical world; and the spirit is the inmost part of man for contacting the spiritual world. Since God is Spirit, we must worship and serve Him in our spirit (Rom. 1:9; John 4:24). Believers are regenerated by the Spirit of God in their spirit, the Spirit of God witnesses with their spirit (Rom. 8:16), the Lord Jesus is with their spirit (2 Tim. 4:22), and they are one spirit with the Lord (1 Cor. 6:17). The spirit must be divided from the soul (Heb. 4:12) so that believers can walk, live, and work in their spirit (Gal. 5:16, 25) and be spiritual men (1 Cor. 2:14-15).
Some time prior to 1925, Watchman Nee came to see the matter of sanctification by faith. He received light concerning the holiness teaching of John Wesley and said that what Wesley taught was not really holiness but sinless perfection. Through his study he came to realize that the Brethren surpassed Wesley in their vision of holiness. Yet while their teaching on holiness was accurate, it was too objective and consisted merely of a sort of positional change. The Brethren taught that gold in the world was common, while gold built into the temple was sanctified. As a further example, the Brethren taught that sheep and cattle in flocks and herds were common, but when offered upon the altar, they were sanctified (Matt. 23:17, 19). In addition, the Brethren illustrated sanctification by pointing out that food in the market is common, but food on the table of Christians becomes sanctified with prayer. Watchman Nee pointed out that all these examples refer to an outward change of position, but none involves an inward dispositional change. He taught that sanctification is not merely a positional change, but that it must also be dispositional (Rom. 6:19, 22).
To His believing ones Christ is life (Col. 3:4), and this life is the Spirit of life (Rom. 8:2) in their spirit. Whatever the believer does must be done out of this inner life. Every believer should live by this divine life within (Gal. 2:20).
The divine life that believers receive from the Lord is in the Holy Spirit. The Holy Spirit is called the Spirit of life (Rom. 8:2). This divine life has its own law and characteristics, and its function is to regulate and supply us with God's divine element. This is not the mere outward letter of the law but the law of life (Heb. 8:10) enforced by the Spirit of God within us. Watchman Nee received a full revelation concerning this inner law. It is by this inner law, called the law of life, that we are freed from the law of sin and death and are able to live a righteous and holy life.