Penance is an attitude befitting the whole Christian life. Penance arises from love for the justice of Christ, not through fear of punishment. The sign of penance is confession. Penance opposes sin as the master of people. Between sin and the certainty of forgiveness there is penitent faith. The penance approved by Luther aimed to cheer the heart. Through his statement on penance, Luther desires to prevent a depreciation of baptism. Penance is thus a return to the beginning, to baptism. In the development of his theology of penance four stages can be described:

1. The foundation of Luther’s view was laid in the monastery by Von Staupiz, the confessor of Luther: he encouraged Luther to observe penance no longer for his ‘precious sins’, but to see the sacrament of penance against the backdrop of the forgiving work of Christ. Only faith justifies.
2. Between 1517 and 1520 there are two thoughts of Luther on the matter: the representation of inner Christian penance and the understanding that the performance of penance does not gain forgiveness. The right motivation for penance is not fear or love of justice, but only the grace of Jesus Christ.
3. Between 1520 and 1527 Luther is engaged in the underlying power of the new life, the reception of the Holy Spirit and moral renewal. That grace is received not through merits via penance, but as a gift. In this period, the sacrament of the penance is appreciated less than baptism and the Lord’s Supper by Luther because he cannot locate a Scripture for penance.
4. From 1528, Luther declares time and again that penance is the interaction between a sense of guilt, aroused through the law in the heart, and the resolution to improvement, brought about by the joy caused by the Gospel.