It was in 1954 that Maslow created the 'Hierarchy of Human Needs' to explain self-actualization and put forth the theory in his book, 'Motivation and Personality'.

Abraham Maslow was a psychologist who mainly studied positive human qualities and the lives of exemplary people. It was on the basis of these studies and findings that he proposed the theory of hierarchy of needs with self-actualization as the highest level of potential that a person can reach. Let us understand this theory in more detail. Maslow's theory stemmed from his need to understand what motivated and drove people to do things. Maslow believed that people are motivated to achieve certain things in life, and when one need is fulfilled, the person moves to the next need and strives to fulfill that one, and so on and so forth. To explain this idea in further detail, Maslow formed what he called a hierarchy pyramid. As the image above illustrates, the pyramid was divided into 5 levels―starting at the physiological needs and ascending towards the final level of self-actualization. Physiological Needs The base level of the pyramid consists of the physiological needs like air, food and water, sleeping, sex, shelter, and excretion. Safety Needs The second level featured needs that had to do with security in terms of resources, employment, family, health, prosperity, and freedom from fear. Love and Belonging Needs The third level consisted of those needs that had to do with friendship, intimacy, love, and affection from family, friends, romantic partners, and the work group. Esteem Needs The 4th level of the pyramid featured those needs that had to do with qualities of esteem, independence, respect from others, self-respect, confidence, achievement, and respecting others. Self-Actualization The last level of this hierarchy consisted of a stage where the person was self-actualized. In that he achieved qualities of creativity, acceptance of facts, lack of prejudice, morality, problem solving and the like. Maslow said that for an individual to reach the self-actualization level (the highest level of his potential), he has to first fulfill all the needs that feature in the previous levels, starting at the physiological level and make his way up to last level. Maslow realized that when people's physiological needs are satisfied, other, higher needs emerge and once those needs are satisfied, still other, higher needs emerge, and the ascent thus continues. Therefore, only when a person has satisfied all his basic (physiological, safety, love, and esteem) needs will he be able to achieve the last level and only then can he truly be known as self-actualized. Even though it sounds simple enough in theory, in practice, this is a little complicated to achieve. The ascent up the pyramid is not always a smooth-flowing one and is thwarted by the want to fulfill the needs from the basic levels over and over again. Moreover, the course of one's life and varied other experiences (loss of job, divorce) will lead to people fluctuating between the varied levels of hierarchy. Maslow also noted that not all people follow a fixed pattern of achieving self-actualization. For some people, the need for self-esteem may be greater than their need for security or love. Thus, as Maslow noted, only one in a hundred people are able to become fully self-actualized because people are stuck in the vortex of these basic needs and moreover, society seems to reward only that motivation which is based on social needs, love, and esteem. Maslow's earliest hierarchy pyramid consisted of these 5 levels, however, with time, more levels of needs were added to the pyramid. Making it a 7-level pyramid with the cognitive and aesthetic needs being added. It later became an 8-leveled pyramid with transcendence needs being added. All three needs were added in the 1960s and 70s. The cognitive and aesthetic needs were added at the 5th and 6th level respectively, after the esteem needs and the transcendence needs were added at the 8th level, after the level of self-actualization needs. Cognitive needs consisted of a want of knowledge, meaning, and information, whereas aesthetic needs consisted of the need for appreciating and looking for beauty, balance, and form. The highest level in the 8-level pyramid was taken up by the transcendence needs which included the need for helping others to gain self-actualization.

Maslow stated that the percentage of people who would go on to achieve self-actualization were very limited. However, based on extensive research of those people he considered to have reached the highest level, he was able to draw a list of characteristics. They are as follows.

Based on these characteristics, Maslow also formulated certain ways of how to satisfy self-actualization needs. These included factors like:

The self-actualization theory was criticized on the basis of Maslow's methodology of testing. In formulating the theory and the characteristics of self-actualization, Maslow had used a method called biographical analysis, in which he studied the biographies and writings of 18 people (a majority of whom were white males) whom he felt were self-actualizers. Thus, the list of characteristics that he developed, seemed more biased and centered around these 18 people than the public in general. And therefore, an objective approach was seen to be missing, as the opinions and subjective views of the examiner gained prime focus. Hence, it was opined that what Maslow considered to be 'self-actualization', need not necessarily be a universal concept. Secondly, according to Maslow, a person was supposed to have fulfilled the basic needs in order to move on to the higher needs of self-actualization, and that without these basic needs having been fulfilled, it was not possible to achieve the same―in that manner, one depended on the other. However, this was found to be a flawed view. It was studied that even though a person who had not met his basic needs (like hunger) he was still capable of achieving a higher order of needs like love and esteem. Similarly, a person who was considered ideal for being 'self-actualized', like an artist, could well be a pauper (another basic need not fulfilled). Thus, on many counts, Maslow's theory was falsified.