This chapter examines Martin Luther’s theology of the sacraments. Luther maintained that sacraments were a form of the Word instituted by Christ that conveyed the forgiveness of sins, and were connected with an external sign—and as such were a powerful way for believers, many of whom were illiterate, to experience firsthand and personally the grace of God. He identified Baptism and Eucharist as sacraments, and occasionally Confession (Penance) as well, though not as a separate sacrament but as an extension of the sacrament of Baptism. Baptism marked not only the establishment of one’s relationship with God, but also identification as part of the church community, and was therefore a sign of oneness in God. Regarding Eucharist, Luther rejected transubstantiation and the idea of Christ being “re-sacrificed” at the Mass, and yet he took Christ’s words of institution literally in identifying the bread and wine as the Body and Blood of Christ, and thus, “food of the soul.” As connected to Luther’s “theology of the cross,” by which believers are utterly dependent upon the grace of God in Jesus Christ, sacraments are a means by which believers can receive and be nourished by that grace.