Bhutan is one country in the entire world to uphold the Tantric form of Mahayana Buddhism. Drukpa Kyagyu (serma or red hat sect) is its state religion. Phajo Drugom Shigpo introduced Drukpa Kagyu in Bhutan in the 13th Century from Tibet. Tshangpa Gyarey founded Drupa Lineage in western Tibet in 12th Century. Zhabdrun Ngawang Namgyel adopted Drukpa Kagyu as the state religion and named the country as ‘Druk’. Choje Drukpa Kunely (divine madman of Bhutan) played the key role in spreading Drukpa Kagya tradition in Bhutan.
Nyingmapa (old sect) is another prominent sect of Mahayana Buddhism. Guru Rinpoche introduced this sect into Bhutan in the 8th Century. Terton (treasure revealer) Pema Lingpa and Dorji Lingpa, Kunkhyen Longchen Rabjam, Dudjom Rinpoche, Namkhai Nyingpo and others preserved the Nyingma tradition in Bhutan.
The state monastic community comprise of central monastic body (zhung dratshang) and district monastic body (rabdeys). The monastic body functions as the sole arbiter on religious matter. It is entitled to an annual support and subsidy from the government. The Je-Khenpo (Chief Abbot) is the head of the monastic body and is assisted by five high-ranking masters (lopens). Rabdeys are headed by Lam Netens.
Most of the Lhotshampas practice Hinduism. The Buddhists also worship most of the Hindu gods and goddesses.
Most Bhutanese worship and propitiate certain deities such as Lha (deities of the heaven above), Tsen (deities of the mountains), Lu (beings of the underneath world) and Sadag (deities of the land), and tsho-men (deities of lakes).
There three religious traditions, including shamanist and animist belief system functions in unison. The country’s constitution guarantees religious freedom, though it limits political activity by religious figures and prohibits proselytism.