That Daoists engaged in sexual practices is well known. But what precisely were these practices, and what was their significance? This paper examines the initiation ritual of Celestial Master Daoism as found in the text entitled Shangqing Huangshu guodu yi. I argue that this practice has been misunderstood by earlier scholars who focused on the sexual aspect of the rite and interpreted it through the cosmological model of yin and yang. I suggest that the ritual procedure described in this text should not be read as a sexual manual but must be placed in the context of Celestial Master ritual and mythology as found in contemporaneous texts. Such a reading reveals that this ritual is based on a cosmogony in which the procreative function of yin and yang is a secondary, and not a primary, stage of cosmogony. Rather than a hierogamy, the real significance of this ritual is, in fact, to transcend the mundane realm, symbolized by the sexual act, and to attain the primordial undifferentiated oneness, beyond sexual division.