The Lokottaravāda (Sanskrit; traditional Chinese: 說出世部; pinyin: shuōchūshì-bù) was one of the early Buddhist schools, according to Mahāyāna doxological sources compiled by Bhavyaviveka, Vinitadeva and others, and was a sub-group which emerged from the Mahāsāṃghika sect.
The name Lokottaravāda means those who follow the supramundane (Skt. lokottara), or transcendent, teachings. Despite bearing this name, all sub-sects of the Mahāsāṃghikas seem to have accepted forms of supramundane or transcendent teachings.
The Śāriputraparipṛccha and the Samayabhedoparacanacakra both suggest that the Lokottaravāda had their origins with the Ekavyāvahārikas and the Gokulikas. While the Mahāsāṃghikas initially flourished in the region around Magadha, the Lokottaravādins are known to have flourished in the Northwest.
The 6th century CE Indian monk Paramārtha wrote that 200 years after the parinirvāṇa of the Buddha, much of the Mahāsāṃghika school moved north of Rājagṛha, and were divided over whether the Mahāyāna teachings should be incorporated formally into their Tripiṭaka. According to this account, they split into three groups based upon the relative manner and degree to which they accepted the authority of these Mahāyāna texts. According to Paramārtha, the Lokottaravādins accepted the Mahāyāna sūtras as the words of the Buddha.