Confucians of the Song Dynasty (960-1279) studied the classical works of their faith, but were also familiar with Buddhist and Taoist teachings. Buddhist thought offered to them many things that they considered worthy of admiration, including ideas such as the nature of the soul and the relation of the individual to the cosmos, ideas not yet fully explored by Confucianism. Song Confucians drew greatly from Buddhist thought as well as their own traditions, thus giving rise to the English-language name of "Neo-Confucianism".

One of the most important exponents of Neo-Confucianism was Zhu Xi (1130–1200). He was a rather prolific writer, maintaining and defending his Confucian beliefs of social harmony and proper personal conduct. One of his most remembered was the book Family Rituals, where he provided detailed advice on how to conduct weddings, funerals, family ceremonies, and the veneration of ancestors. Buddhist thought soon attracted him, and he began to argue in Confucian style for the Buddhist observance of high moral standards. He also believed that it was important to practical affairs that one should engage in both academic and philosophical pursuits, although his writings are concentrated more on issues of theoretical (as opposed to practical) significance. It is reputed that he wrote many essays attempting to explain how his ideas were not Buddhist or Taoist, and included some heated denunciations of Buddhism and Taoism.

There were many competing views within the Neo-Confucian community, but overall, a system emerged that resembled both Buddhist and Taoist (Daoist) thought of the time and some of the ideas expressed in the I Ching (Book of Changes) as well as other yin yang theories associated with the Taiji symbol (Taijitu). A well known Neo-Confucian motif is paintings of Confucius, Buddha, and Lao Tzu all drinking out of the same vinegar jar, paintings associated with the slogan "The three teachings are one!"

While Neo-Confucianism incorporated Buddhist and Taoist ideas, many Neo-Confucianists strongly oppose Buddhism and Taoism. Indeed, they rejected the Buddhist and Taoist religions. One of Han Yu's most famous essays decries the worship of Buddhist relics. Nonetheless, Neo-Confucian writings adapted Buddhist thoughts and beliefs to the Confucian interest. In China Neo-Confucianism was an officially-recognized creed from its development during the Song dynasty until the early twentieth century, and lands in the sphere of Song China (Vietnam, and Japan) were all deeply influenced by Neo-Confucianism for more than half a millennium.