The reincarnation system (tulku) is a distinguishing characteristic of Tibetan Buddhism, which is based the theory that Buddha's soul never vanishes and incarnates in succession to lead his followers and to accomplish his mission. In 1193, the religious leader of Karma Kagyu tradition of Tibetan Buddhism, Dusum Chenpa and the first Karmapa, passed away. The late lama told his disciples that he would return as a reincarnation. His disciples soon led a search for his infant reincarnation in accordance with his will. Several years later Karma Pakshi turned out as the first reincarnation in Tibet and trained to be Karma Kagyu leader. Then the reincarnation system was adopted by other sects gradually to keep a consistent religious leadership. Gelugpa tradition of Tibetan Buddhism, the Yellow Hat sect, applied the system also to hand down the titles conferred on the third Dalai Lama and the fourth Panchen Lama to keep their established religious and secular title and power. There were hundreds of Gyalwas (Living Buddhas) whose heirs were selected by applying the system, among whom the Dalai Lama and the Panchen Lama are the most prestigious two. By the end of the Qing Dynasty there were 160 high lamas registered with the Board for Mongolian and Tibetan Affairs, applying the reincarnation system to locate their next successors.

Religious methods and rituals are used to identify a reincarnation of a late high lama. A search party headed by a high lama begins the search soon. After a religious retreat, lamas, dispatched out in disguise, scour Tibet for special signs, new mothers who had unusual dreams and children who have special knowledge without being taught and special physical traits, such as big earlaps. Oracles, portents, dreams and the late lama's prophesy will be referred to in order to help the search. Some lamas will be sent to Lhamo Latso, the Oracle Lake, to look for prophetic visions to help locate the reincarnation. Usually, there will be dozens of candidates sought. They will be tested with the late lama's possessions and those who have amazing knowledge to identify his predecessor's belongings win out and are the final candidates. Since the search could be easily manipulated and dispute occurs, such as in the case of the sixth Dalai Lama, Emperor Qianlong of the Qing Dynasty decided to use a gold urn lottery as a divination to eliminate false candidates. The names and birth dates of the final candidates were written on ivory lots, wrapped up and sealed in the urn. Religious rituals were held before the lottery. After the lottery seriously held in the Jokhang Temple, a new religious leader would be soon installed if the procedure was verified by the central government.