As used both in everyday language and in the literature of occupational therapy, occupation is an ambiguous term. This article defines occupation unambiguously as the relationship between two things: occupational form and occupational performance. Each occupational form has an objective nature independent of the individual engaged in the occupation; sociocultural as well as physical characteristics constitute each occupational form. Occupational performance, in turn, is the action elicited, guided, or structured by the preexisting occupational form. Although occupational form may be said to predict or explain occupational performance, the nature of occupation is not deterministic. A series of figures in the paper graphically depicts how the individual’s interpretation of an occupational form (its meaning) depends on the individual’s developmental structure, and how occupational performance depends on the individual’s sense of purpose. The dynamics of occupation are such that occupational performance impacts on subsequent occupational forms and promotes adaptations in the individual’s own developmental structure. The framework explained here can be applied to different levels of occupation, depending upon the unit of time used by the analyst. A table presents an extensive set of examples oriented to a specific occupation. Recommendations for future scholarly inquiry are made.