What is the relationship between Bon and Tibetan Buddhism?

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Part of the trouble is that the term Bon has been used historically to refer to several rather different groups and traditions. It is used to refer to the pre-Buddhist religion of Tibet which is depicted in the Tibetan histories as being barbaric and based on using evil spirits to defeat their enemies. Traditionally, Padmasabhava, one of the main figures credited with establishing Buddhism in Tibet, is regarded as having subdued these spirits, converting them to Buddhism and getting them to act as protectors instead of violent beings.

Obviously these texts were written by Buddhist scholars and show the pre-Buddhist religion in a quite negative light, so we probably can't rely on them too much.

Bon is also used to refer to another separate religion in Tibet that exists even today that has very strong similarities to Tibetan Buddhism, particularly the old Nyingma school, in that it also has treasure texts which claim to have been secretly written many years ago and then discovered, and also shares the Nyingma teachings on dzogchen, a type of meditation based on direct observation of the mind.

These are very different from one another, and the influence goes both ways. Old Bon had a strong influence on developing Tibetan Buddhism with many of its figures being appropriated as protectors and many religious folk customs simply being mixed in with Buddhism, and the New Bon essentially drawing its doctrines from Tibetan Buddhism and giving it a new name.

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Also, from the little I have read, there is no proof (yet) that Bon is any older than Tibetan Buddhism. HH the Dalai Lama, I believe, has formally recognized Bon as one of the Schools of Tibetan Buddhism. (So now there are Nyingma, Sakya, Gelukpa, Kagyu, Jonang, and, last but not least, Bon.)

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