The theory of the ultimate truth can be regarded as the fundamental doctrine of the perfect and merging philosophy of Tiantai Buddhism. Zhiyi presents his theory of the ”three thousand dharmas in one instant thought” and ”perfect and merging threefold truth” as the real substance of all dharmas. With the inspiration of studying his comprehensive work The profound meaning of the Lotus Sutra, this paper intends to explore in detail Zhiyi's system of identification in terms of eight types of concept in revealing the nature of things and the relationship among things, so that the dynamic feature of his perfect and merging philosophy can be demonstrated.