The phrase "atman is Brahman" captures the Vedanta school's primary view about ultimate reality and our human relationship to it. The Vedanta school of Hindu thought is one of the largest and most dominant perspectives in Hindu philosophy.
What does "atman is Brahman" mean?
Let's break the phrase down into its two basic concepts.
First is "atman" - loosely translated, this means "soul" or "individual soul." Atman refers to the essence of each individual living thing - its soul or primary living energy. Each living thing - people, animals, plants - have an atman that forms each thing's eternal essence. The atman is not the body; the body is not eternal. The body houses the atman until the body dies. Atman is immortal and eternal.
Brahman is "world soul" or "cosmic soul." It is the eternal essence of the universe and the ultimate divine reality. It is the life source of all that has been, is and will be throughout the entire cosmos. It is not an individual being - it is more like the primal ground or reality of all being and existence.
So, the phrase "atman is Brahman" is saying, quite simply, that the individual soul is the world soul.
In other words, each individual soul - say, yours or mine - comes from and is made of the same reality as the world soul. There is no distinction between us, on the one hand, and the ultimate divine reality, on the other.