While Deepavali is popularly known as the "festival of lights", the most significant esoteric meaning is "the awareness of the inner light".

Central to Hindu philosophy, is the assertion that there is something beyond the physical body and mind which is pure, infinite, and eternal, called the Atman. Just as we celebrate the birth of our physical being, Deepavali is the celebration of this Inner Light, in particular the knowing of which outshines all darkness (removes all obstacles and dispels all ignorance), awakening the individual to one's true nature, not as the body, but as the unchanging, infinite, imminent and transcendent reality. With the realization of the Atman, comes universal compassion, love, and the awareness of the oneness of all things (higher knowledge). This brings Ananda (Inner Joy or Peace).

Deepawali celebrates this through festive fireworks, lights, flowers, sharing sweets, and worship. While the story behind Deepavali varies from region to region, the essence is the same - to rejoice in the Inner Light (Atman) or the underlying reality of all things (Brahman).