Many claim that T'ai Chi is the most Taoist of all Chinese Martial Arts. Its origins can, therefore, be traced to the beginnings of Taoism. According to one legend, some ten thousand years ago a mysterious race of giants, later known as the Sons of Reflected Light, introduced many technological skills to ancient China. These skills included silk-making, metallurgy, ceramics, glass-blowing, and the manufacture of gun power. They also taught the way the human body functions, this later formed the basis of Pa Chin Hsin (The Eight Strands of the Brocade), a fundamental text of Chinese medicine. According to this teaching, the human body is guided by Chi, the life force, which is centered in the lower abdomen. Chi is a source of great energy; by performing certain exercises, such as those taught by the Sons of Reflected Light, it Chi flows to specific parts of the body, giving great strength and stamina.

T'ai Chi is considered to be one of the Neijia (internal or soft) styles of Kung Fu. Other accounts of its origins are therefore tied to the legendary Buddhist Monk Bodhidharma, who is believed to have arrived in Central China in the Sixth Century and settled in a monastery next to the Shaolin Temple. There he introduced a new Buddhist philosophy, called Ch'an (Zen in Japan), stressing the importance of meditation. Upon his arrival in the Shaolin Temple, he found the monks weak and sickly from there severe ascetic regimen. He also discovered that they were constantly attacked by local bandits. Therefore developing a series of exercises and a form of meditation in motion through which they could both improve their health and defend themselves. It is likely that these exercises were somehow developed from the Indian practice of yoga. The exercises were influenced by the Taoist principle of Chi, in which strength comes not through physical power, but from the correct channeling of Chi through the body. The exercises taught by Bodhidharma were later expanded and developed into Wushu, the Martial Arts.

T'ai Chi can trace its origin to a mysterious Twelfth-Century Taoist Monk named Chang San-Feng. Little is known about Chang, except that he was also known as "Chang Laor Taor" (Chang the Slob) apparently because of his ragtag appearance. According to one account, Chang was studying Wushu at the Shaolin Temple. One night, he dreamed that God appeared to him and taught him how to fight. When he woke up, he had forgotten everything that God had taught him. That day he went to the forest to meditate and came across a snake fighting a crane. Neither animal could gain the advantage. When the crane would attack, the snake would weave its body away; when the snake attacked, the crane would jump up or perch on a branch. Chang soon realized that what he was watching was the very principle that he had learned in his dream; the secret of yielding before an attacker rather than meeting force with force. From this he created a new Martial Art: T'ai Chi Chuan.

The first historical teacher of T'ai Chi was Chang Wang-Ting, who practiced and taught his art during the sixteenth century. There are now several schools of T'ai Chi, including the Wu, Yang, Sung, Chen and Lee. All are based on the teachings of Chang Wang-ting. In recent years several new schools, were created by combining principles of the older, traditional schools. Some years ago, the masters of the traditional schools met and created a unified system of T'ai Chi. The form that developed was later modified and now forms the basis of the T'ai Chi that is taught in most schools in the West today.