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With the help of Adolph Freiherr Knigge, on May 1, 1776 Weishaupt formed the "Order of Perfectibilists", which was later known as the Illuminati. Some claim that this founding date is the origin for the date of the Communist May Day observance. He adopted the name of "Brother Spartacus" within the order. Though the Order was not egalitarian or democratic, its mission was to establish a New World Order, which meant the abolition of all governments and religions.

Weishaupt wrote: the ends justified the means. The actual character of the society was determined by its traditionalist enemies to be an elaborate network of spies and counter-spies. Each isolated cell of initiates reported to a superior, whom they did not know, a party structure that was effectively adopted by some later groups, including more recently by the early Ba'ath party in Syria and Iraq.

Weishaupt was initiated into Freemasonry Lodge "Theodor zum guten Rath", at Munich in 1777 by Adolf Freiherr Knigge. His project of "illumination, enlightening the understanding by the sun of reason, which will dispel the clouds of superstition and of prejudice" was an unwelcome reform. Soon however he had developed gnostic mysteries of his own, with the goal of "perfecting human" nature through re-education to achieve a communal state with nature, freed of government and organized religion. He began working towards incorporating his system of Illuminism into that of Masonry, with the aim of creating a New World Order.

He wrote: "I did not bring Deism into Bavaria," he wrote, "more than into Rome. I found it here, in great vigour, more abounding than in any of the neighboring Protestant States. I am proud to be known to the world as the founder of the Illuminati."

Weishaupt's radical rationalism, sweeping away nations and religions, private property and marriage, with the vocabulary used by the French Revolution, was not likely to succeed. Writings that were intercepted in 1784 were interpreted as seditious, and the Society was banned by the government of Karl Theodor, Elector of Bavaria in 1784. Weishaupt lost his position at the University of Ingolstadt and fled Bavaria.