Abstract: The most important characteristic of Laozi Zhigui is using the idea of Shenming (神明) and Taihe (太和) to interpret Dao. Some scholars explain Shenming and Taihe as different stages in universal development. This cosmological explanation doesn't fit with the whole text of Zhigui. Shenming and Taihe are the demonstration of Dao itself. Shenming displays the spiritual dimension of Dao and connects Dao to the life of human individual, showing Dao's significant influence in human world. Taihe represents harmony and diversity, which are a positive expression of the work of Dao in the world. The idea of Shenming and Taihe is a great contribution to the philosophy of Dao.