The second school of the Hinayana is known as the Sautrantikas school of thought. The extra-mental existence of the phenomenal world is believed by the Sautrantikas though the human soul does not realize the existence and the intensity of it. The human soul perceives the existence of the external objects through their mental presentation and this is opposed by the Sautrantikas.

The Sautrantikas school of thought can be best understood through the arguments presented by Madhava, the exponent of the Dvaita Philosophy. The argument stands for the truth of the survival of an external world by the Sautrantikas. The Sautrantikas believe that the awakening of the external world does not occur according to the will of the human being. The world remains external to consciousness. The Sautrantikas theory leads the human mind to an absolute unity lifted beyond the distinction of self and not-self.

The Sautrantikas hold the view that there can be no perceptual knowledge of objects without external objects. While holding that there can be no perceptual, the Sautrantikas indicate that these outer objects are only momentary. The Sautrantikas, the hypothetical dualists, or cosmothetic idealists deny any immediate knowledge of an independent world, but admit the reality of it to account for our perceptions and images.

The Sautrantikas explains the process of knowledge after the acquisition of the reality of the external world. The arousal of knowledge depends on the basis of four conditions, which are: (i) data, or alambana; (2) suggestion, or samanantara; (3) medium, or sahakari; and (4) dominant organ, or adhi-patirupa. Perception is defined by Dharmakirti, in his Nyayabindu, as a presentation determined exclusively by the object and free from all mental impositions or `kalpana`. This is the theory of the Sautrantikas school of thought. This knowledge is referred to as `nirvikalpa` or indeterminate knowledge, while `savikalpa` or determinate knowledge involves the conceptual activity of the mind. Dharmakirti opines that names and relations are promulgated by the mind and the senses reveal the objects accurately unless the organic or extraneous causes debauch them. It is not easy to perceive the actual perception of purity, the respective contributions of the object and the mind.

The Sautrantikas accepted the atomic theory with very little difference from the Vaibhafikas. The Sautrantikas consider `akasa` as the ultimate atom. The Sautrantikas holds the belief that thought can think itself, and stands for the existence of the self-consciousness of human mind, which the Vaibhasikas and the Madhyamikas oppose. Yasomitra, the Sautrantikas and the commentator of the Abhidharmakosa of Vasubandhu, who deals with the reality of God, frames that the creature are neither the creation of `Ishvara` or God, nor `Purusha` or spirit and nor even the `Pradhana` or matter. Yasomitra stands for the view that every thing happens logically and everything has a reason, not God sole among them. Though it was believed by the sons of Sakyas, that the evolution of the world has no beginning later the Buddhist school of thought believed that the plurality of causes indicate the way to the primordial answer, The God.