Tzimtzum, contraction, withdrawal, is Isaac Luria's answer to a question earlier Kabbalah had not pressed hard: if Ein Sof is infinite and leaves no place empty, where is there room for anything that is not God? The answer is that the first act of creation was not an outpouring but a retraction. God withdrew from a point within himself, leaving a vacated space, the halal panui, in which finite existence could stand, and into that space directed a measured ray of light.
How to read this divided the tradition, and the division was consequential. Taken literally, tzimtzum is an actual withdrawal, and the world occupies a space genuinely empty of the divine essence. That reading preserves God's transcendence and the substantial reality of creatures, and it was defended in the Lithuanian tradition, in the school of the Vilna Gaon and in Hayyim of Volozhin's Nefesh ha-Hayyim. Taken figuratively, the Hasidic position, stated with great force in Shneur Zalman of Liady's Tanya, the withdrawal is a concealment relative to creatures and nothing more. Nothing is empty of God, the vacated space is an appearance, and the conclusion is frankly acosmic: from God's side, creation adds nothing whatever. The eighteenth-century conflict between Hasidim and their Mitnagdic opponents turned in part on this disagreement and on what followed from it for prayer and for the status of the material world.
The term has had a long afterlife outside Kabbalah. It was taken up in Christian Kabbalah, in German idealism, and in twentieth-century theology as a model of divine self-limitation making creaturely freedom possible, Hans Jonas's post-Holocaust essay on the concept of God is among the best-known instances. Historians of Kabbalah frequently note that such uses detach the word from the cosmogonic system in which it does its work, where it is inseparable from the breaking of the vessels and from tikkun.