When one is liberated, he theoretically understands that the living entity is not composed of material elements but is spirit soul, distinct from matter. Simply by theoretically understanding this doctrine, one can be called liberated, but actually a mukta, or liberated soul, is he who understands his constitutional position as an eternal servant of the Lord. Such liberated souls engage with faith and devotion in the service of the Lord, and they are called kṛṣṇa-bhaktas, or Kṛṣṇa conscious persons.
Kṛṣṇa-bhaktas are free from all material desires. Those who are liberated theoretically by knowing simply that the living entity is not material may still have desires, although they may be technically classified amongst liberated souls. Their main desire is to become one with the Supreme Personality of Godhead. Generally such persons are very much attached to Vedic rituals and righteous activities, performing them in order to enjoy material prosperity. Even when some of them transcend material enjoyment, they still try to enjoy the spiritual world by merging into the existence of the Supreme Lord.