The Earthsea Cycle by Ursula K. Le Guin, regarded as one of the most successful Western fantasy novels worldwide, constructs for the readers a fantasy Earthsea world where the harmonious combination of Oriental philosophy and Western literature lays the pillar. Drawing upon the philosophy of Taoism and Tao Te Ching, and resorting to the analysis of the three most significant elements in the book, true name, this essay conducts a profound and comprehensive exploration of the Taoist wonders in The Earthsea Cycle. This essay illustrates the connections among true name, language creation view and Tao to reveal how true name reflects the nature of life and existence. At last, the essay concludes that The Earthsea Cycle is a literary work of Western fantasy entwined with Oriental Taoist philosophy. True name is the essence of existence in the Earthsea world, while magic originates from the need to develop while following the course of nature. All things in The Earthsea Cycle rely on nature and inaction, and grow within the circle of life.