This paper focuses on the methodology embedded in the philosophical system of He-shang-gung's Annotations of Lao Zi, pointing out first that it changes Lao Zi's substantial idea of Tao into the cosmologic sense of Tao, making an ontological question into a cosmological issue. The philosophy of longevity mentioned in the book is a cosmological philosophy rather than one of amrita, since the theory is not well grounded enough to be the intellectual foundation of amrita. The book also argues that personal cultivation is just like the governance of the state, connecting the issue of social philosophy with the issue of metaphysics, building the principle of state governance on Lao Zi's idea of do-nothingism, seeing the cosmology in the book as a way to cultivate oneself. Finally the author argues that the ideas about demons and deities in the book can't constitute the ontology of demons and deities yet, let alone the philosophy of divine cultivation. This paper also refers to the question about how to study a philosophical system s the methodlogy of studying different philosophers. Determining the status of the theories, we can decide the importance of a philosopher's system in the history of philosophy.