Caodong school
Dahui also moved south and taught both monks and laymen. It was at this time that he began his severe criticism of the "heretical Chan of silent illumination" of the Caodong school which he would continue for the rest of his life. He became a great favorite of the educated and literate classes as well as Chan monks and in 1137, at the age of forty-nine, Chancellor Zhang Jun (), a student of Dahui, appointed him abbot of Jingshan monastery in the new capital Lin-an (modern Hangzhou, Zhejiang). Within a few years his sangha grew to two thousand and among his lay followers were many high-ranking officials. Dahui became the acknowledged leader of Buddhism of the Southern Song dynasty.