Internal alchemy refers to essence, qi (vital energy), and spirit as the "Three Treasures" of the human body. Essence, qi, and spirit are further divided into innate and acquired types. The so-called innate refers to those intangible, natural and instinctive things that transcend the boundaries of time and space, viewed from the initial state of nature and human society. The so-called acquired refers to those tangible, man-made things that are consistent with the laws of material movement, viewed from the realistic state of the material world and secular society. As the essential elements of human life, essence, qi, and spirit not only have the distinction between innate and acquired, but can also be transformed into each other.

Acquired essence, in the narrow sense, refers to the semen ejaculated during human sexual intercourse; in the broad sense, it also includes various hormones secreted by the human body. Innate essence, which is instinctively produced in a state of non-action, is also called "primordial essence" or "true essence". It mainly refers to the spontaneous sexual function that is not stimulated by lust; in the broad sense, it also includes the natural functions of the endocrine system, circulatory system, etc., that stimulate life vitality. Acquired qi refers to the breath of respiration; innate qi is primordial qi or true qi, written as "qi". It is a code name for the condensation of essence and qi into one, referring to the function of human life activities, embodied as a highly ordered energy flow and physical vitality. Acquired spirit is the spirit of thinking, called the spirit of cognition; innate spirit is called primordial spirit (derived from the transformation of primordial qi into spirit, which is the result of the condensation of qi and spirit), presenting an extremely clear state of non-thinking. Essence, qi, and spirit are also regarded as the medicines for practicing internal alchemy.