The article explores the inner logic and defining features of Daoist freedom. It argues that Daoist freedom can be meaningfully understood as psychological hygiene, and it suggests that Daoist xuan-jie (懸解) can be rendered possible only if one can rid oneself of intensional suffering—an idea ultimately inspired by Friedrich Nietzsche. This comparative approach enables the article contribute to the received way of understanding Daoist freedom by stressing its dialectics: by being at ease with one’s social and political environment, Daoist freedom demands social criticism, calling for room for people to be able to act spontaneously so that all can nurture their distinctive natures and have a full and free exercise of their natural abilities. The article aims to achieve two objectives at once: it aims to argue for the understanding of Daoist freedom as psychological hygiene, and it defends this reading by bringing two dimensions of Daoist freedom into a consistent whole. In a constantly changing and increasingly pluralistic world, psychological hygiene and social criticism are both necessary for leading a robust and healthy human life.