In 1899, Steiner decided to publish an article in the Magazin für Literatur, titled "Goethe's Secret Revelation", on the esoteric nature of Goethe's fairy tale, The Green Snake and the Beautiful Lily. This article led to an invitation by the Count and Countess Brockdorff to speak to a gathering of Theosophists on the subject of Friedrich Nietzsche.
Steiner continued speaking regularly to the members of the Theosophical Society, becoming the head of its newly constituted German section in 1902. By 1904, Steiner was appointed by Annie Besant to be leader of the Esoteric Society for Germany and Austria. Steiner made it clear that this school would teach a Western spiritual path harmonious with, but differing fundamentally in approach from, other Theosophical paths. The German Section of the Theosophical Society grew rapidly under Steiner's leadership as he lectured throughout much of Europe on his spiritual science.
Differences with Besant became particularly pronounced at the Theosophical Congress in Munich in 1907. Organized by Steiner, its focus on artistic expression was a sharp departure from the Blavatsky tradition. From 1909 Steiner's lecture cycles gave emphasis to his positive researches into Christianity, toward which Mme. Blavatsky had been notably hostile.
The tensions grew between the main society and the German section, finally coming to a head over the question of Jiddu Krishnamurti, a young Indian boy to whom the Theosophical leaders Annie Besant and C. W. Leadbeater attributed messianic status. The majority of German-speaking Theosophists broke away to found a new Anthroposophical Society at the end of 1912. Shortly thereafter, Besant revoked the German section's membership in the Theosophical Society on the grounds of the national section's refusal to allow admission to adherents of the organization Star of the East, established to support the mission of Krishnamurti.
The breaking point came when C. W. Leadbeater, followed by Annie Besant, claimed that a young Indian boy, Jiddu Krishnamurti, was the new World Teacher, an incarnation of the Lord Maitreya. Steiner quickly denied this attribution of messianic status to Krishnamurti, claiming that Christ's earthly incarnation in Jesus was a unique event. Steiner held that though the human being generally goes through a series of repeated earth lives, the spiritual being Christ incarnated only once in a physical body. Christ, he said, would reappear in "the etheric" — the realm that lives between people and in community life — not as a physical individual.
The German Theosophical Society refused membership to members of the Order of the Star in the East, an organization founded by Leadbeater and Besant to support Krishnamurti's supposed mission as the new World Teacher. The World Teacher concept was unpopular with many theosophists, and was repudiated by Krishnamurti himself in 1929, leading to a crisis in the Theosophical Society. It was, however, a basic principle of the Theosophical Society that adherents of all religions were admitted.
Anthroposophists were offended when Besant falsely claimed that Steiner had been educated by Jesuits.
Steiner's popularity as a lecturer spread far beyond the borders of Germany: he was active in Switzerland, Holland, Norway, Austria and other countries. Besant tried to restrict him to lecturing in Germany itself, but this contravened both Theosophical Society statutes as well as a statement of Besant's greeting this broadening lecture activity, issued some months before.
As a result of the conflict, two steps followed in rapid succession:
Steiner later claimed that he never had considered himself to be part of the Theosophical movement. Even while the leader of the German section of the movement, he made a great point of his complete independence of philosophical thought and esoteric teachings from the Theosophical Society's esoteric path. His reaction to the above events was: "I myself experience what has happened — apart from what has been sobering and painful — as a great liberation from the oppressive narrowness that has characterized the life of the Theosophical Society for years.
The basic structural skeletons of Steiner's cosmology and of his description of the human being as composed of various physical and spiritual aspects are based on Blavatsky's schema, to whom he acknowledged his debt. Steiner's elaborations of these (in his Theosophy and Outline of Esoteric Science) diverge from other theosophical presentations both in style and in substance, however.