The Kagyu ("oral transmission") school of Tibetan Buddhism traces its origins to Tilopa (968-1069), a tantric master of India. Tilopa is credited with developing a meditation method called Mahamudra that would become a foundational practice of Kagyu.
One of Tilopa's disciples was named Naropa (956-1041). By this time Buddhism had become firmly established in Tibet, and Tibetans were traveling to India to seek out teachers. Among those who studied with Naropa was a lay student named Marpa Lotsawa (1012-1097), sometimes called Marpa the Translator.
The intrepid Marpa made three trips to India and eventually received all of Naropa's teachings, becoming one of his dharma heirs. He spent the rest of his life in Tibet, giving teachings and transmissions and translating Buddhist scriptures into Tibetan.
Marpa's most famous student was Jetsun Milarepa (1052--1135). Milarepa would become one of Tibet's greatest poets and yogis, and his life became one of Tibet's favorite epic stories.
In brief, Milarepa studied with a sorcerer and mastered black magic in his youth. But he repented and sought out Marpa for teaching. Milarepa mastered the teachings and realized great enlightenment.
One of Milarepa's students, Gampopa Sonam Rinchen (1079-1153), is generally credited with founding the Dakpo Kagyu school, which is the main Kagyu tradition and usually just called "Kagyu." Gampopa had mastered another tantric system called Kadampa, and his synthesis of Kadampa and Mahamudra became the basis of Kagyu practice. Let's look briefly at each.
Mahamudra means "great seal" or "great symbol." Mahamudra is a combination of practices, including meditation and tantra yoga, focusing on the nature of mind. Mahamudra is especially dedicated to direct insight into sunyata, emptiness.
Thubten Yeshe said, "Mahāmudrā means absolute seal, totality, unchangeability. Sealing something implies that you cannot destroy it. Mahāmudrā was not created or invented by anybody; therefore it cannot be destroyed. It is absolute reality."
Atisha (980-1054) was a renowned scholar of India who came to Tibet at the request of a Tibetan prince, Jangchup O. Atisha had a profound influence on the monastic traditions of Tibet and how tantra yoga would be taught and practiced for generations to come. His disciples, who preached Atisha's teachings far and wide, came to be called kadampas -- in Tibetan, ka refers to the Buddha's scriptures, and dam to the advice of Atisha.
The practices taught by the kadampas were calibrated to replace selfish desires with selfless compassion. For example, the kapampas were the first to teach tonglen, a meditation practice in which one takes in all the suffering of the world while sending out happiness to all beings.
Kadampa as a distinctive tradition ceased to exist in the 16th century, but this was not before its teachings were absorbed into all schools of Tibetan Buddhism.
Note that a new school calling itself the New Kadampa Tradition is not connected, at least not more than all other Tibetan schools, to the original Kadampa.
Kagyu Transmission Lineages
Let's go back to Milarepa's disciple Gampopa, founder of Dakpo Kagyu. Four disciples of Gampopa founded the four major transmission lineages of Kagyu: Barom Kagyu, Phaktru Kagyu, Karma Kagyu, and Tsalpa Kagyu.
These lineages have many active sub-lineages. Note that the Phaktru Drukpa lineage was adopted as the state religion of Bhutan, and the King of Bhutan serves as its head.
In addition to these, two other lineages with somewhat different histories are considered part of the Kagyu tradition but not the Dakpo Kagyu founded by Gampopa.
Shangpa Kagyu was founded by a yogi named Khyungpo Nyaljor (978-1079). Like Marpa, he traveled to India for teaching, and one of his 150 teachers was Niguma, the consort of Naropa. Like Gampopa, Khyungpo Nyaljor combined Kadampa and Mahamudra practices.
Rechung Kagyu was founded by a yogi named Rechung Dorje Drakpa, or Rechungpa. Rechungpa was a student of Milarepa, and his lineage was separate from those of Gampopa. Rechung Kagyu no longer exists as a separate lineage, however.
Most of the masters of Kagyu lineages escaped Tibet in the 1950s after the Chinese invasion. They established new monasteries in India, Nepal, and Bhutan.
The Karmapa Controversy
For centuries the Karmapa Lama had been the head of the Karma Kagyu school. The Karmapas are the first and oldest lineage of tulkus, or reborn masters. The first Karmapa was Dusum Khyenpa (1110-1193), a disciple of Gampopa who founded Karma Kagyu. At the request of His Holiness the 14th Dalai Lama, the Karmapa is now the head of the entire Kagyu school.
The lama most commonly acknowledged to be the current (17th) Karmapa is His Holiness Ogyen Trinley Dorje. However, a significant faction of Karma Kagyu insists another young man, Trinlay Thaye Dorje, is the real 17th Karmapa. And a smaller group says both men are the reborn Karmapa. The controversy threatens to tear Karma Kagyu apart, and at the moment there is no resolution in sight.