This conception of the material world is very nicely explained by Śrīla Rūpa Gosvāmī, who says that when persons renounce the material world as illusory or false without knowing that the material world is a manifestation of the Supreme Lord, their renunciation is of no value. The Vaiṣṇavas, however, are free of attachment to this world because although the material world is generally accepted as an object of sense gratification, the Vaiṣṇavas are not in favor of sense gratification and are therefore not attached to material activities. The Vaiṣṇava accepts this material world according to the regulative principles of the Vedic injunctions and works without attachment. Since the Supreme Personality of Godhead is the original cause of everything, the Vaiṣṇava sees everything in relationship with Kṛṣṇa, even in this material world. By such advanced knowledge, everything becomes spiritualized. In other words, everything in the material world is already spiritual, but due to our lack of knowledge we see things as material.
The personified Vedas presented the example that those seeking gold do not reject gold earrings, gold bangles or anything else made of gold simply because they are shaped differently from the original gold. All living entities are part and parcel of the Supreme Lord and are qualitatively one, but they are now differently shaped in 8,400,000 species of life, just like many different ornaments manufactured from the same source of gold. As one who is interested in gold accepts all the differently shaped gold ornaments, so a Vaiṣṇava, knowing well that all living entities are of the same quality as the Supreme Personality of Godhead, accepts all living entities as eternal servants of God. As a Vaiṣṇava, then, one has ample opportunity to serve the Supreme Personality of Godhead simply by reclaiming these conditioned, misled living entities, training them in Kṛṣṇa consciousness and leading them back home, back to Godhead. The fact is that the minds of the living entities are now agitated by the three material qualities, and the living entities are therefore transmigrating, as if in dreams, from one body to another. When their consciousness is changed into Kṛṣṇa consciousness, however, they immediately fix Kṛṣṇa within their hearts, and thus their path for liberation becomes clear.
In all the Vedas the Supreme Personality of Godhead and the living entities are stated to be of the same quality—cetana, or spiritual. This is confirmed in the Padma Purāṇa, wherein it is said that there are two kinds of spiritual entities: one is called the jīva, and the other is called the Supreme Lord. From Lord Brahmā down to the ant, all living entities are jīvas, whereas the Lord is the supreme four-handed Viṣṇu, or Janārdana. Strictly speaking, the word ātmā can be applied only to the Supreme Personality of Godhead, but because the living entities are His parts and parcels, sometimes the word ātmā is applied to them also. The living entities are therefore called jīvātmā, and the Supreme Lord is called Paramātmā. Both the Paramātmā and the jīvātmā are within this material world, and therefore this material world has a purpose other than sense gratification. The conception of a life of sense gratification is illusion, but the conception of service by the jīvātmā to the Paramātmā, even in this material world, is not at all illusory. A Kṛṣṇa conscious person is fully aware of this fact, and thus he does not take this material world to be false but acts in the reality of transcendental service. The devotee therefore sees everything in this material world as an opportunity to serve the Lord. He does not reject anything as material but dovetails everything in the service of the Lord. Thus a devotee is always in the transcendental position, and everything he uses becomes spiritually purified by being used in the Lord’s service.
Śrīdhara Svāmī has composed a nice verse in this regard: “I worship the Supreme Personality of Godhead, who is always manifested as reality even within this material world, which is considered by some to be false.” The conception of the falsity of this material world is due to a lack of knowledge, but a person advanced in Kṛṣṇa consciousness sees the Supreme Personality of Godhead in everything. This is actual realization of the Vedic aphorism sarvaṁ khalv idaṁ brahma: “Everything is Brahman.”