The teachings that were later called Daoism were first known under the name of Huanglao Dao in the 3rd and 2nd cent. BCE. The thought world transmitted in this stream is what Sima Tan meant by Daojia. The Huanglao school was a center of Daoist practitioners in the state of Qi (modern Shandong).

Huangdi was the name for the Yellow Emperor, from whom the rulers of Qi said they were descended. When Emperor Wu, the sixth sovereign of the Han dynasty (r. 140-87 BCE) elevated Confucianism to the status of the official state ideology and training in it became mandatory for all bureaucratic officials, the tension with Daoism became more evident. And yet, at court people still sought longevity.

Wu continued to engage in many Daoist practices, including the use of alchemy, climbing sacred Taishan (Mt. Tai), and presenting petitions to heaven. Wu forced his Daoist relative Liu An, the Prince of Huainan to commit suicide. Liu's death meant the end of the Daoist academy he had established and which was associated with the production of the work called the Master of Huainan (Huainanzi, 180-122 BCE).

The text was an attempt to merge cosmology, Confucian ideals, and a political theory using "quotes" attributed to Huangdi, although the statements are actually from the Daodejing and the Zhuangzi. All this is of added significance because in the later Han work, Laozi binahua jing (Book of the Transformations of Laozi) the Chinese physics that persons and objects change forms was employed in order to identify Laozi with Huangdi.