Like Aristotle, Ibn Rushd views the study of the psyche as a part of physics, since it is related specifically to the generable and corruptible union of form and matter found in the physical world and passed from generation to generation through the seed and natural heat. Ibn Rushd's views on psychology are most fully discussed in his Talkbis Kitab al-Nafs (Aristotle on the Soul). Here Ibn Rushd, as M. Fakhry comments, divided the soul into five faculties: the nutritive, the sensitive, the imaginative, the appetitive and the rational. The primary psychological faculty of all plants and animals is the nutritive or vegetative faculty, passed on through sexual generation, as noted above. The remaining four higher faculties are dependent on the nutritive faculty and are really perfections of this faculty, the product of a nature urging to move higher and higher.
The nutritive faculty uses natural heat to convert nutrients from potentiality to actuality, which are essential for basic survival, growth and reproduction of the living organism. , This faculty is an active power which is moved by the heavenly body (Active Intellect). Meanwhile, the sensitive faculty is a passive power divided into two aspects, the proximate and the ultimate, in which the former is moved within the embryo by the heavenly body and the latter is moved by sensible objects. The sensitive faculty in finite, in that it is passive, mutable, related to sensible forms and dependent upon the animal's physical senses (e.g. touch or vision). A part of these senses, notes Fakhry, is the sensus communis, a sort of sixth sense that perceives common sensibles (i.e. objects that require more than one sense to observe), discriminates among these sensibles, and comprehends that it perceives. Benmakhlouf notes that the imaginative faculty is dependent on the sensitive faculty, in that its forms result from the sensible forms, which Fakhry contends are stored in sensus communis. It differs from the sensitive faculty, however, by the fact that it "apprehends objects which are no longer present…its apprehensions are often false or fictitious," and it can unite individual images of objects perceived separately. Imagination is not opinion or reasoning, since it can conceive of unfalsified things and its objects are particular not universal, and may be finite because it is mutable (moving from potentiality to actuality by the forms stored in the sensus communis). The imaginative faculty stimulates the appetitive faculty, which is understood as desire, since it imagines desirable objects. Fakhry adds that the imaginative and appetitive faculties are essentially related, in that it is the former that moves the latter to desire or reject any pleasurable or repulsive object.
The rational faculty, seen as the capstone of Ibn Rushd's psychology by Fakhry, is unlike the imaginative faculty, in that it apprehends motion in a universal way and separate from matter. It has two divisions, the practical and theoretical, given to humans alone for their ultimate moral and intellectual perfection. The rational faculty is the power that allows humanity to create, understand and be ethical. The practical is derived from the sensual and imaginative faculties, in that it is rooted in sensibles and related to moral virtues like friendship and love. The theoretical apprehends universal intelligibles and does not need an external agent for intellectualization, contrary to the doctrine of the Active Intellect in Neoplatonism.
In its effort to achieve perfection, the rational faculty moves from potentiality to actuality. In doing so it goes through a number of stages, know as the process of intellectation. Ibn Rushd had discerned, as seen in his Long Commentary on De Anima, five distinct meanings of the Aristotelian intellect. They were, first and foremost, the material (potential) and the active (agent) intellects.
There is evidence of some evolution in Ibn Rushd's thought on the intellect, notably in his Middle Commentary on De Anima where he combines the positions of Alexander and Themistius for his doctrine on the material intellect and in his Long Commentary and the Tahafut where Ibn Rushd rejected Alexander and endorsed Themistius’ position that "material intellect is a single incorporeal eternal substance that becomes attached to the imaginative faculties of individual humans." Thus, the human soul is a separate substance ontologically identical with the active intellect; and when this active intellect is embodied in an individual human it is the material intellect. The material intellect is analogous to prime matter, in that it is pure potentiality able to receive universal forms. As such, the human mind is a composite of the material intellect and the passive intellect, which is the third element of the intellect. The passive intellect is identified with the imagination, which, as noted above, is the sense-connected finite and passive faculty that receives particular sensual forms. When the material intellect is actualized by information received, it is described as the speculative (habitual) intellect. As the speculative intellect moves towards perfection, having the active intellect as an object of thought, it becomes the acquired intellect. In that, it is aided by the active intellect, perceived in the way Aristotle had taught, to acquire intelligible thoughts. The idea of the soul's perfection occurring through having the active intellect as a greater object of thought is introduced elsewhere, and its application to religious doctrine is seen. In the Tahafut, Ibn Rushd speaks of the soul as a faculty that comes to resemble the focus of its intention, and when its attention focuses more upon eternal and universal knowledge, it become more like the eternal and universal. As such, when the soul perfects itself, it becomes like our intellect. This, of course, has impact on Ibn Rushd’s doctrine of the afterlife. Leaman contends that Ibn Rushd understands the process of knowing as a progression of detachment from the material and individual to become a sort of generalized species, in which the soul may survive death. This contradicts traditional religious views of the afterlife, which Ibn Rushd determines to be valuable in a political sense, in that it compels citizens to ethical behaviour.
Elsewhere, Ibn Rushd maintains that it is the Muslim doctrine of the afterlife that best motivates people to an ethical life. The Christian and Jewish doctrines, he notes, are too focused upon the spiritual elements of the afterlife, while the Muslim description of the physical pleasures are more enticing. Of course, Ibn Rushd does not ultimately reject the idea of a physical afterlife, but for him it is unlikely.
A number of other problems remain in Ibn Rushd's doctrine of the soul and intellect. For instance, if the material intellect is one and eternal for all humans, how is it divided and individualized? His immediate reply was that division can only occur within material forms, thus it is the human body that divides and individualizes the material intellect. Nevertheless, aside from this and other problems raised, on some of which Aquinas takes him to task, Ibn Rushd succeeded in providing an explanation of the human soul and intellect that did not involve an immediate transcendent agent. This opposed the explanations found among the Neoplatonists, allowing a further argument for rejecting of Neoplatonic emanation theories. Even so, notes Davidson, Ibn Rushd’s theory of the material intellect was something foreign to Aristotle.