The story begins with Indra, the king of gods, riding his elephant. He came upon a sage named Durvasa. The sage decided to honour Indra by giving him a scented garland. Indra took the garland, but placed it on the forehead of his elephant. The elephant was irritated by the scent and threw the garland off, trampling on it. The angry sage cursed Indra and the Adityas(gods) to lose all their wealth; and be deprived of Laxmi, the goddess of wealth and prosperity. Indra was thus immediately dispossessed of all his wealth and treasures.

Indra then approached Brahma, the creator, to help him regain his treasures who suggested him to churn the Ocean of Milk in order to regain his treasures and obtain the Nectar of Immortality. However, such a stupendous task could not be performed by the Adityas (gods) alone, so they sought the help of their enemies, the Asuras, with the understanding that the Asuras would be allowed to partake a portion of the Amrita (divine nectar of immortality).

The ocean was churned by using the Mount Mandara as the pole and the King of Snakes, Vasuki, as the rope. The gods held the tail of the snake while the demons (Asuras) held the head end of the snake and they pulled on it alternately causing the mountain to rotate which in turn churned the ocean. However, once the mountain was placed on the ocean, it began to sink. Then came Vishnu in his second incarnation, in the form of a turtle Kurma, and supported the mountain on his shell back.

As the ocean was churned, a deadly poison known as Halahala emerged. This poison threatened to suffocate all living things. In response to various prayers, Shiva drank the poison; his wife Parvati, alarmed, stopped it in his throat with her hands. This caused the throat to turn blue. Due to this, he is called Nilakantha (nila = "blue", kantha = "throat"). Then, various treasures (ratnas) emerged from the ocean of milk. The 14 Ratnas were:

Finally, Dhanvantari, the Heavenly Physician, emerged with a pot containing amrita, the heavenly nectar of immortality. As the Asuras rushed to take the nectar, the frightened Adityas appealed to Vishnu, who then took the form of Mohini. As a beautiful and enchanting damsel, Mohini distracted the Asuras, took the amrita, and distributed it amongst the Adityas who drank it. One Asura, Rahu, disguised himself as an Aditya, and drank some Nectar. Due to their luminous nature the Sun God Surya and the Moon God Chandra noticed the switching of sides. They informed Mohini. But before the Nectar could pass his throat, Mohini cut off his head with Her divine discus, the Sudarshana Chakra. The head, due to its contact with the amrita, remained immortal. To gain revenge on Sun and Moon for exposing this - It is believed that this immortal head occasionally swallows the sun or the moon, causing eclipses. Then, the sun or moon passes through the opening at the neck, ending the eclipse.

The story represents the spiritual endeavor of a person to achieve self-realisation through concentration of mind, withdrawal of senses, control of desires and practice of austerities and asceticism.

The Devas and Asuras represent the positives and negatives respectively of one's personality. The participation of both the Devas and the Asuras signifies that when one is seeking bliss through spiritual practice, one has to integrate and harmonise both the positive and negative aspects and put both the energies to work for the common goal. The ocean of milk is the mind or the human consciousness. The mind is like an ocean while the thoughts and emotions are the waves in the ocean. Mandhara, the mountain symbolises concentration. The word Mandhara is made up of two words Mana (mind) and Dhara (a single line) which means holding the mind in one line. This is possible only by concentration. Mount Mandhara was upheld by Lord Vishnu as a Kurma (tortoise). The tortoise here symbolises the withdrawal of the senses into oneself (just as a tortoise withdraws its head into its shell) as one practices mental concentration and meditation or contemplation.

Vasuki symbolises desire. Vasuki used in the churning of the ocean denotes that the Devas and the demons held desire (to seek immortality) as a rope and churned the mind with the help of concentration and withdrawal of the senses. Desire, if not controlled will overpower and destroy an individual. The Halahala poison symbolises suffering and pain (counter-reaction of the mind and body) that one undergoes at the beginning of spiritual sadhana (practice). When the mind is subjected to intense concentration, the first thing that comes out of the process is intense suffering and great inner turmoil. These must be resolved otherwise further progress is not possible.

Lord Shiva symbolises the ascetic principle. His role in this story as the consumer of poison suggests that one can deal with the early problems of spiritual life by cultivating the qualities of Lord Shiva, namely, courage, initiative, willingness, discipline, simplicity, austerity, detachment, compassion, pure love and asceticism. The various precious objects that come out of the ocean during the churning stand for the psychic or spiritual powers (Siddhis) which one gains as s/he progresses spiritually from stage to stage. The seeker should be careful about these powers as they can hamper her/his progress unless s/he uses them judiciously, not for selfish gains but for others' welfare. This is the reason why the Gods and demons distributed these objects as they did not want to lose sight of their original aim which was to gain immortality.

Dhanvantari symbolises health and signifies that immortality (longevity, to be correct) or spiritual success can be achieved only when the body and the mind are in a perfect state of health. Mohini symbolises delusion of the mind in the form of (or originating from) pride. It is the pride of achievement to which the asuras or the demons succumbed and thus lost sight of their goal. Pride and egoism are the last hurdles one has to overcome in spiritual life before experiencing self-realisation. The Amrit symbolises the ultimate achievement of the goal of self-realistion.