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Lit. "The Great Seal", a meditation system that was propagated in India, mainly by the Mahasiddha Saraha, from whom it was handed down in various lineages. Two of these lineages were introduced into Tibet by the great translator Marpa, the founder of the Kagyu lineage in Tibet. One of these lineages originated with the buddha Vajradhara and continued through Nagarjuna, Charyapa, Lavapa and Sukhasiddhi to Tilopa, and then via Naropa to Marpa. The other lineage also originated with Vajradhara. It then continued via Ratnamati, Saraha, Nagarjuna, Shavaripa and Maitripa to Marpa.
Mahamudra is one of the most direct practices for realising one's own buddha nature and forms the basis of the Vajrayana view of the Kagyu schools. Students are introduced to their fundamental nature without any philosophical argumentation and are encouraged to train in that experience. Mahamudra practice begins with the preliminaries and continues with training in Shamata and Vipashyana, progressing into what is called the "Four Yogas of Mahamudra" (phyag rgya chen po'i rnal 'byor bzhi) which are one-pointedness (rtse gcig), simplicity (spros bral), one taste (ro gcig), and non-meditation (sgom med).

A definition of Mahamudra as given by the 9th Karmapa Wangchuk Dorje (1556-1603):

An Excerpt from Mahamudra: The Ocean of Definitive Meaning (p. 254)

by the 9th Karmapa, dbang phyug rdo rje [1556-1603]

SUPPLEMENTARY TOPICS ([145.6])

THE CLASSIFICATIONS OF MAHAMUDRA

Teaching Session 92

[145.6] Although no descriptions can completely cover all the modes of classification, in brief there are three: ground mahamudra, path mahamudra, and fruition mahamudra.

GROUND MAHAMUDRA

[Ground mahamudra] is what is realized and actualized by the nondual mind of the buddhas (which was explained above) [145b] and noble individuals. It is the basic state (Tib. gshis kyi babs) of the three realms of samsara and the true nature of all phenomena from the beginning. It is connate wisdom (lhan gcig skyes pa'i ye shes), which pervades the entire ground. It is present within the mind-stream of all of us sentient beings, from the insects that live inside grass stems up to the buddhas. It is the natural purity (rang bzhin rnam bdag), which is neither positive nor negative, large nor small, and so forth.

Samsara and nirvana manifest according to whether the mode of being (bzhugs tshul) of the true nature, the dharmakaya, is realized or not. Even when there is realization, dharmata (present as the ground and free from elaborations) is the creator (byed pa po) of all that exists, samsara and nirvana. Because nothing transcends this, it is [known as] mudra (phyag rgya, seal). Since there is nothing to be sought that is higher than this--no superior "dharmakaya"--it is fit to be referred to as "maha" (chen po, great).

[Ground mahamudra] is present within the mind-stream of all sentient beings. It is the inseparability of appearances and emptiness, awareness and emptiness, and bliss and emptiness. It is spontaneously present as the nature of the three kayas and the five wisdoms. It is free from arising, abiding, and cessation, and from the extremes of the conceptual elaborations of existence and nonexistence.

Nevertheless, [146] through the force of one's own connate ignorance (lhan gcig skyes pa'i ma rig pa), one does not recognize this, as when one is shown an object in a dark room. This true nature transcends verbal or mental descriptions and cannot be conceptually identified, just as a drawing cannot be created in fire or space. It is not known, just as the eyes cannot see themselves, because it is beyond involving an objective and subjective aspect (yul yul can), or an object of awareness and one who is aware. It is not recognized because there is no guru who can show it, like a prince wandering [incognito] among the masses. It is not known because it is the single expanse (dbyings gcig), like medicinal camphor become poison. It is not recognized because its nature, which abides as awareness, is immediately and incorrectly aware, and imputes mistakenly, as when a rope is mistaken for a snake.

Therefore, because imputational ignorance (kun brtags pa'i ma rig pa) does not recognize reflexive awareness (rang rig), there [develops the idea of] an "I" where there is no "I," a self where there is no self, and conceptual elaborations where there are no elaborations. One is motivated by desire, aversion, and delusion; karma accumulates and matures; one wanders in samsara.

Because [ground mahamudra] is too close (nye drags pa), it is not recognized. Due to this mistake, despite it being present within oneself and always accompanying one, one lacks conviction about this. [Although] it is just like one's own face, [146b] one wanders in samsara through ignorance.

Because it is too easy (sla drags pa), it is not trusted. The small-minded think, given that buddhahood is endowed with the major and minor marks or with the dharmakaya, it cannot be the same as ordinary mind; that this does not make sense. Since they do not trust in this, they do not recognize it.

Because it is too profound (zab drags pa), it is not recognized. Beings are distracted by the net of thoughts and lack unwavering mindfulness. Therefore, due to the fault of not identifying it, they do not recognize this.

Because it is too excellent (bzang drags), it is not recognized. Mind relaxed in its own state--mind that does not identify that state, reflexive awareness that is vivid (sa le ba) yet without any object--is the dharmakaya. But since this dharmakaya seems incomprehensible, it is not recognized.

These types of ignorance must be abandoned. The methods for doing so are to exert oneself [following] the oral instructions (gdams ngag) of a guru, path mahamudra, and the stages of practice, which will remove [this ignorance].

This excerpt is from the section on supplementary topics, covering the classification of mahamudra, and the definition of ground mahamudra ([145.6], Teaching Session 92, pp. 255-56 in Mahamudra:The Ocean of Definitive Certainty).

From http://www.nitartha.org/mahamudra_excerpt.html

further suggested reading

• Everyday Consciousness and Buddha-Awakening, Khenchen Thrangu Rinpoche.
• Clarifying the Natural State, Dakpo Tashi Namgyal, Rangjung Yeshe Publications, ISBN 9627341452
• Crystal Clear, Khenchen Thrangu Rinpoche, Rangjung Yeshe Publications, ISBN 9627341517
• Garland of Mahamudra Practices, Khenchen Konchog Gyaltshen Rinpoche
• King of Samadhi, Khenchen Thrangu Rinpoche, Rangjung Yeshe Publications, ISBN 9627341193
• Lamp of Mahamudra, Tsele Natsok Rangdröl, Rangjung Yeshe Publications, ISBN 9627341312
• Mahamudra Teachings of the Supreme Siddhas, the Eighth Situpa Tenpai Nyinchay, H.H. the Third Gyalwa Karmapa Rangjung Dorje, intro. by Thrangu Rinpoche, trans. & ed. by Lama Sherab Dorje.
• Mahamudra: The Ocean of Definitive Meaning, the 9th Karmapa, Wangchuk Dorje
• Mahamudra: The Quintessence of Mind and Meditation, Takpo Tashi Namgyal, trans.& annotated by Lobsang Lhalungpa, Shambhala Publ.
• Present Fresh Wakefulness, Chökyi Nyima Rinpoche, Rangjung Yeshe Publications, ISBN 962734147
• Rain of Wisdom, the Ocean of the Songs of the Kagyü Gurus, translated and published by Nalanda Translation Committee, Shambhala Publ, ISBN 1570624917
• Songs of Naropa, Khenchen Thrangu Rinpoche, Rangjung Yeshe Publications, ISBN 9627341282
• An Ocean of the Ultimate Meaning, Teachings on Mahamudra, Khenchen Thrangu Rinpoche, Shambala Publ., ISBN 1590300556