Chan Master Nanquan Puyuan (748–834) developed his own Chan ideas by inheriting those of Mazu Daoyi (709–788). His ideas have attracted much attention, especially with regard to the clarification of Mazu’s ideas. In this paper, the clarification on “the union of function and Buddha nature” of Mazu in the NanquanYuyao is studied. In conclusion, Nanquan’s ideas can be characterized as concentration on the truth which is beyond language, concept, and cognition of function. Because there is no form to the truth, nor has it any name, it is inappropriate to cling to verbal concepts such as “the union of mind and Buddha,” “Neither mind nor Buddha,” “The union of cognition and the truth.” In other words, for Nanquan it was clear that no Buddhist concepts should be clung to. This corrects the mistake that simply equates “cognition of function” with “Buddha nature.” However, this does not necessarily deny “the union of function and Buddha nature.” This viewpoint is then inherited by his disciples, such as Changsha Jingceng and Zhaozhou Congnian. The clarification regarding on “the union of function and Buddha nature” has been an important topic and attracted much attention even in the Song Dynasty.