In this article, I propose to describe the relationship between the Hung-chou Branch of the Southern School of Ch'an Buddhism and the group of leisurely poets in Lo-yang, the eastern capital of the T'ang Dynasty, of which Pai Chu-i (772-846) was the central figure. Since there are still many unresolved questions about the Hung-chou Branch, I begin with a study of this branch. First, drawing upon available Ch'an Buddhist sources, I am able to fix the dates for the establishment of the Hung-chou Branch by Tao-i (709-788) at 772-775. Second, I define the basic concept of the branch as "ordinary human nature is Buddha-nature," which posits that human nature, good or evil, equals Buddha-nature, making Ch'an Buddhism a practice of acquiring transcendent experience through secular life. Third, based on concrete evidence, I propose that Tao-i was profoundly influenced by the Ch'an patriarchs of the Niu-t'ou and Shih-t'ou Branches. The second part of the article explains how this basic concept of Hung-chou Ch'an influenced Pai Chu-i's concept of "the middling hermit." The traditional idea of "eremitism in officialdom" emphasized the detachment of mind from body--the body at the court and the mind in the mountains. Pai wiped out this detachment and recombined the mind and body into one. "The middling hermit" occupied a leisurely official post in Lo-yang and led a comfortable and self-indulgent life in his private garden, writing joyful poems, yet acquiring transcendent experience of eremitism. This concept of eremitism was supported by the Ch'an thought of the Hung-chou Branch. The third part of the article describes the impact of Pai's concept on the group of leisurely poets in Lo-yang. While Pai was a "middling hermit" there from 829 to 846, many official-poets followed him, forming a poets' group that included great names such as Liu Yu-hsi (772-842), Li Shen (772-846), P'ei Tu (765-839) and Niu Seng-ju (780-848). The life styles and poetry of the members of this group show the same inclinations as those of Pai Chu-i.