In the story, Zhuangzi dreams that he is a butterfly, fluttering about without a care in the world. He experiences the world from the perspective of a butterfly, unaware of his own identity as Zhuangzi. Upon waking, he ponders whether he is Zhuangzi who dreamed of being a butterfly or a butterfly now dreaming of being Zhuangzi. This anecdote is often interpreted as a commentary on the nature of reality, perception, and the self.

The story raises questions about the distinction between reality and illusion, suggesting that our perception of reality may not always be reliable. It also invites contemplation on the fluidity of identity and the interconnectedness of all things. The image of Zhuangzi dreaming of a butterfly has become a well-known symbol in Chinese philosophy and has been interpreted and analyzed by scholars and thinkers for centuries.