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Chaos Magic is a relatively new form of ritual and empty-handed magic, utilizing paradigm shifting and inhibitory or excitatory states of consciousness, called "gnosis," including, but not limited to, meditation, chanting, spinning, dancing, drug use, pain or orgasm. Practitioners hold that they can shape reality using this form of magic.

Austin Osman Spare was initially involved with the Hermetic Order of the Golden Dawn tradition, and its offshoots such as the O.T.O and Aleister Crowley's Argenteum Astrum but later broke with them to work independently. He would develop theory and practices which would, after his death, profoundly influence the Illuminates of Thanateros. Specifically, Spare developed the use of sigils, and techniques involving states of ecstasy (see gnosis below) to empower these. Spare also pioneered the development of a personal sacred alphabet, and was a talented artist who used images as part of his magical technique. Most of the recent work on sigils recapitulate's Spares work; the construction of a phrase detailing the magical intent, the elimination of duplicate letters, and the artistic recombination of the remaining letters to form the sigil. Though he did not originate the term and might not have sympathized with it, some may regard Spare as the original chaos magician.

Following the death of Aleister Crowley (and the then-obscure Spare), magick as practiced by the still somewhat sparse occult subculture in Britain tended to become more experimentalist, personal and a lot less bound to the magickal traditions of established magical orders. Reasons for this might include the public availability of previously secret information on magick (especially in the published works of Crowley and Israel Regardie), the radically unorthodox magick of Austin Osman Spare's Zos Kia Cultus, the influence of Discordianism and its popularizer Robert Anton Wilson, and the increasing popularity of magick caused by the success of the Wiccan faith and the use of psychedelic drugs.

The term chaos magick first appeared in print in the widely influential Liber Null by Peter Carroll, first published in 1978. In it, Carroll formulated several concepts on magic that were radically different from what was considered magical mysteries in the days of Crowley. This book, along with Psychonaut (1981) by the same author, remain important sourcebooks. Magicians who align themselves with these ideas call themselves Chaotes, Chaoists or sometimes Chaosites.

Carroll also co-founded with Ray Sherwin the Magical Pact of the Illuminates of Thanateros, or in short form Illuminates of Thanateros (IOT); an organization that continues research and development of chaos magic to the present day. Most authors and otherwise well-known practitioners of chaos magick mention affiliation with it. However, chaos magick in general is, unsurprisingly, among the least organized branches of magick.

Perhaps the most striking feature of chaos magick is the concept of the magical paradigm shift. Borrowing a term from philosopher Thomas Kuhn, Carroll made the technique of arbitrarily changing one's model (or paradigm) of magick a major concept of chaos magic. An example of a magickal paradigm shift is doing a Lovecraftian rite, followed by using a technique from an Edred Thorsson book in the following ritual. These two magickal paradigms are very different, but while the chaote is using one, he believes in it fully to the extent of ignoring all other (often contradictory) ones. The shifting of magickal paradigms has since found its way into the magickal work of practitioners of many other magickal traditions, but chaos magick remains the field where it is most developed.

The main tenet of Chaos magick is that "Nothing is True and Everything is Permitted," a quote attributed to Hassan I Sabbah and used by Friedrich Nietzsche in his work Thus Spoke Zarathustra. Like Crowley's "Do what thou wilt shall be the whole of the law," this phrase is often mistakenly interpreted in its most literal sense to mean "there is no such thing as Truth, so you can do whatever you want." However, "Nothing is True and Everything is Permitted" is more widely interpreted to mean "there is no such thing as an objective truth outside of our perception; therefore, all things are true and possible."

The idea is that belief is a tool that can be applied at will rather than unconsciously. Some chaos magickians think that trying unusual, and often bizarre beliefs is in itself an experience worth having and consider flexibility of belief a form of power or freedom in a cybernetic sense of the word.

A concept introduced by Carroll is the gnostic state, also referred to as gnosis. This is defined as a special state of consciousness that in his magick theory is what is necessary for working most forms of magick. This is a departure from older concepts which described energies, spirits or symbolic acts as the source of magickal powers. The concept has an ancestor in the Buddhist concept of Samadhi, made popular in western occultism by Aleister Crowley and further explored by Austin Osman Spare.

The gnostic state is achieved when a person's mind is focused on only one point, thought, or goal and all other thoughts are thrust out. Users of chaos magick each develop their own ways of reaching this state. All such methods hinge on the belief that a simple thought or direction experienced during the gnostic state and then forgotten quickly afterwards is sent to the subconscious, rather than the conscious mind, where it can be enacted through means unknown to the conscious mind.