This article applies a synthetic approach of philological, religious, philosophical, and cultural studies to explore the original meaning of the terms dao and de, two primary concepts in traditional Chinese intellectual history. Through an etymological analysis of the characters dao and de, and supported by both received and discovered texts and materials, this article demonstrates that dao originally represented the spirit of the Pole Star/High God and the movement of Heaven, and de, in relation to dao, originally represented the impartial virtue and power of Heaven. In terms of this new interpretation, the article further discusses the signification of dao and de in the Laozi to uncover the mystic aspects of the text.