The religious or mystical system which Crowley founded, into which most of his nonfiction writings fall, is named Thelema. Thelema combines a radical form of philosophical libertarianism, akin in some ways to Nietzsche, with a mystical initiatory system derived in part from the Golden Dawn.

Chief among the precepts of Thelema is the sovereignty of the individual will: "Do what thou wilt shall be the whole of the Law." Crowley's idea of will, however, is not simply the individual's desires or wishes, but also incorporates a sense of the person's destiny or greater purpose: what he termed the "Magick Will." Much of the initiatory system of Thelema is focused on discovering one's true will, true purpose, or higher self. Much else is devoted to an Eastern-inspired dissolution of the individual ego, as a means to that end (see Choronzon).

The second precept of Thelema is "Love is the law, love under will" — and Crowley's meaning of "Love" is as complex as that of "Will". It is frequently sexual: Crowley's system, like elements of the Golden Dawn before him, sees the dichotomy and tension between the male and female as fundamental to existence, and sexual "magick" and metaphor form a significant part of Thelemic ritual.

Thelema draws on numerous older sources and, like many other new religious movements of its time, combines "Western" and "Eastern" traditions. Its chief Western influences include the Golden Dawn, Kabbalah, and elements of Freemasonry; Eastern influences include aspects of yoga, Taoism, and Tantra.
 

Crowley claimed to use a scientific method to study what people at the time called "spiritual" experiences, making "The Method of Science, the Aim of Religion" the catchphrase of his magazine The Equinox. By this he meant that mystical experiences should not be taken at face value, but critiqued and experimented with in order to arrive at their underlying religious meaning. In this he may be considered to foreshadow Dr. Timothy Leary, who at one point sought to apply the same method to psychedelic drug experiences. Yet like Leary's, Crowley's method has received little "scientific" attention outside the circle of Thelema's practitioners.

Crowley's magical and initiatory system has amongst its innermost reaches a set of teachings on sex "magick." He frequently expressed views about sex that were radical for his time, and published numerous poems and tracts combining pagan religious themes with sexual imagery both heterosexual and homosexual.

Sex Magick is the use of the sex act—or the energies, passions or arousal states it evokes—as a point upon which to focus the will or magical desire for effects in the non-sexual world. In this, Crowley was inspired by Paschal Beverly Randolph, an American author writing in the 1870s who wrote (in his book Eulis!) of using the "nuptive moment" (orgasm) as the time to make a "prayer" for events to occur.