The doctrine of justification was, as John Calvin stated, the "hinge of the reformation." James Buchanan provides us with the classic "reformed" definition: "Justification is a legal, or forensic, term, and is used in Scripture to denote the acceptance of any one as righteous in the sight of God." (The Doctrine of Justification, p. 226). Understood in this way, justification is purely extrinsic to the sinner, inasmuch as he is justified solely on the basis of Christ's righteousness graciously imputed to him. The sinner does not become righteous himself, but because he trusts in Christ's work for him, he is considered innocent by God the judge. In this way, works contribute nothing to justification; it is "by faith alone" (sola fide).
In contrast is the Roman Catholic position, which sadly, few evangelicals even bother to consider, let alone understand. In many cases, the issue is naively boiled down to justification by faith, on the one hand (evangelicalism), versus justification by works, on the other hand (Roman Catholicism). This crass caricature has little basis in reality, and hampers the cause for theological truth and Christian unity. In this essay then, I will summarize the Roman Catholic teaching on justification. To accomplish this task, I will consider the Council of Trent's "Decree Concerning Justification," (Session VI) the most authoritative, even-handed, representative Church pronouncement on the issue to date (the Council was held 1545-1563). I will also consider a wide array of Catholic authors, both past and present.
My goal is to set forth the Catholic position, not to critique it. Thus, I will not preface my remarks with such phrases as "the Catholic position says" or "in Rome's view." The reader should assume that all of the text represents the Catholic teaching.
Now the Catholic view of grace and justification is very complex. Due to the scope of this essay, therefore, many subject areas (e.g., metaphysical questions, purgatory, indulgences, the mode of God's indwelling in the soul, etc) relating to the Catholic teaching on justification have been excluded. The reader should consult the bibliography for elaboration on certain points.
You can read the whole thing here. It is one of the many works I read when I was thinking more seriously about Catholicism.