The exact meaning varies between the various Buddhist schools and traditions. The best known interpretation is from the Madhyamaka school of Mahāyāna Buddhism, whose founder was Nagarjuna, For Nagarjuna, the two truths are epistemological truths. The phenomenal world is accorded a provisional existence. The character of the phenomenal world is declared to be neither real nor unreal, but logically indeterminable. Ultimately, phenomena are empty (sunyata) of an inherent self or essence, but exist depending on other phenomena (Pratītyasamutpāda).
In Chinese Buddhism, the Madhyamaka position is accepted and the two truths refer to two ontological truths. Reality exists of two levels, a relative level and an absolute level. Based on their understanding of the Mahayana Mahaparinirvana Sutra, the Chinese supposed that the teaching of the Buddha-nature was, as stated by that sutra, the final Buddhist teaching, and that there is an essential truth above sunyata and the two truths.
The śūnyatā doctrine is an attempt to show that it is neither proper nor strictly justifiable to regard any metaphysical system as absolutely valid. It doesn't lead to nihilism but strikes a middle course between excessive naivete and excessive scepticism.
Satya is usually taken to mean "truth", but does also refer to mean "a reality," "a genuinely real existent." "Satya" (Sat-yá) is derived from Sat and ya. Sat means being, reality, and is the present participle of the root as "to be" (PIE *h₁es-; cognate to English is). Ya and yam means "advancing, supporting, hold up, sustain, one that moves". As a composite word, Satya and Satyam imply that "which supports, sustains and advances reality, being"; it literally means, "that which is true, actual, real, genuine, trustworthy, valid".
The two truths doctrine states that there is:
The conventional truth may be interpreted as "obscurative truth" or "that which obscures the true nature" as a result. It is constituted by the appearances of mistaken awareness. Conventional truth would be the appearance that includes a duality of apprehender and apprehended, and objects perceived within that. Ultimate truths, are phenomena free from the duality of apprehender and apprehended.