Ahaṅkāra is that which produces abhimāna, the sense of ‘I’ and ‘mine.’ According to Sāṅkhyan metaphysics, a large part of which is accepted by Vedānta, ahaṅkāra is the principle of individuation that arises after mahat or buddhi in the process of evolution from prakṛti (nature). It is regarded as a substance since it is the material cause of other substances like the mind or the sense-organs. Through its action the different puruṣas (individual selves) become endowed each with a separate mental background. These puruṣas identify themselves with the acts of prakṛti through ahaṅkāra.
At the individual level it makes the puruṣa feel that he is receiving the sensations through the senses and the mind, and deciding about appropriate action, through the intellect.
At the cosmic level, the five senses of cognition (jñānendriyas), the five organs of action (karmendriyas), the mind (manas) and the five subtle elements like the earth (tanmātras) are produced out of ahaṅkāra.
In some works of Vedānta, ahaṅkāra is considered as a function of antaḥkaraṇa (internal instrument or mind), responsible for ego-sense and possessiveness.
Ahaṅkāra as egoism or self-conceit is considered as a great obstacle in spiritual life and the cultivation of humility is prescribed as its antidote.
See also SĀṄKHYA DARŚANA.