"Did Buddha ever taught physical reality was/is an "illusion"?"

Krodha replied the redditor:

Yes, this is a strong theme throughout Buddhist teachings.

Some examples from the Pali Canon, starting with the Pheṇapiṇḍūpama Sutta SN 22.95:

Form is like a lump of foam; feeling is like a bubble; perception seems like a mirage; choices like a banana tree; and consciousness like a magic trick: so taught the Kinsman of the Sun. However you contemplate them, examining them carefully, they’re void and hollow when you look at them closely. Concerning this body, he of vast wisdom has taught that when three things are given up, you’ll see this form discarded. Vitality, warmth, and consciousness: when they leave the body, it lies there tossed aside, food for others, mindless.

Such is this process, this illusion, cooed over by fools. It’s said to be a killer, for no substance is found here. An energetic mendicant should examine the aggregates like this, with situational awareness and mindfulness whether by day or by night.

They should give up all fetters, and make a refuge for themselves. They should live as though their head was on fire, aspiring to the imperishable state.

Another from Udānavarga 2.18:

He who has perceived that this body is (empty) as a vase, and who knows that all things (dharma) are as an illusion, does thus destroy the chief of Māra's flowers, and will no more be seen by the king of death.

He who has perceived that this world is like froth, and who knows that all things are as an illusion, does thus destroy the chief of Māra's flowers, and will no more be seen by the king of death. He who has perceived that this body is like froth, and who knows that all things are as an illusion, does thus destroy the chief of Māra's flowers, and will no more be seen by the king of death.

Another, SA 265:

Monks, it is just as if a master magician or the disciple of a master magician at a crossroads creates the magical illusion of an elephant troop, a horse troop, a chariot troop, and an infantry troop, and a clear-sighted person carefully examines, attends to, and analyses it. At the time of carefully examining, attending to, and analysing it, he finds that there is nothing in it, nothing stable, nothing substantial, it has no solidity. Why is that? It is because there is nothing solid or substantial in a magical illusion.

Some Mahāyāna examples, in the Bhadramāyākāra Sūtra, it is said:

Maudgalyāyana, moreover, since the illusions of Bhadra the Magician are partial, his illusions are not true; but the illusions of the Tathāgata are true, therefore, all phenomena are fully realized to be illusory.

The Samādhirāja states:

All existence is like an illusion, powerless, like foam that gathers and becomes hollow.

And,

The primal nature of phenomena is empty, like an illusion, which tirthikas are unable to know. Understanding all phenomena to be similar to illusions, is not the domain of signs.

The Ārya-lalitavistara-nāma-mahāyāna-sūtra says:

Because of dwelling in the equivalence of all phenomena with illusions, mirages, dreams, water moons, echoes and double vision, the Dharma free of affliction is perfectly realized.

The Ārya-mañjuśrīvikurvāṇaparivarta-nāma-mahāyāna-sūtra:

Further, sister, the five aggregates are illusory. They do not exist. There is no arising of erroneous action. It is conventionally designated through an error. Sister, awakening is like an illusion, it does not exist, it is conventionally designated through an error. Sister, though awakening is like an illusion, it does not exist, it is conventionally designated through an error. Therefore, sister, because illusions are the same, the aggregates are the same. Because the aggregates are the same, illusion is the same. Since illusion is the same, awakening is the same. Since awakening is the same, illusion is the same. Sister, therefore, I call you "awakened".

The Ārya-ghanavyūha-nāma-mahāyāna-sūtra says:

The suchness of all phenomena arises through power of mutual relation, the yogins seeing in that way clearly see it as suchness. The perfected nature is the dharmatā of phenomena; all phenomena do not arise as the substantial entities of the imputed: empty, insubstantial, beyond the extremes of existence and nonexistence, similar with illusions and dreams, like fairy castles, like opthalmia and like mirages.

The Acintyastavaḥ says:

Like a dream, an illusion, [or] seeing two moons: Thus have You [The Buddha] seen the world, as a creation not created as real. Like a son who is born, established, and dies in a dream, the world, You have said, is not really born, does not endure, and is not destroyed... According to cognition of truth, [however], You maintain that there is no annihilation or permanence. [You] assert that the entire world is empty of substance, like a mirage.

The Lokātītastava states:

You [The Buddha] have stated that all arising is like the arising of an illusion. Therefore You have fully understood that this world has arisen due to imagination. It is unreal, [and] not having originated it cannot be destroyed.

The Mahāyānaviṁśikā:

The object of knowledge in dream is not seen when one awakes. Similarly the world disappears to him who is awakened from the darkness of ignorance. The creation of illusion is nothing but illusion. When everything is compound there is nothing which can be regarded as a real thing. Such is the nature of all things. As the figments of a dream dissolve upon waking, so the confusion of Samsara fades away in enlightenment.

——-

Interesting that people are upvoting u/Sneezlebee’s inaccurate answer that “the Buddha never said physical reality itself is an illusion.”

And OP finds that “reassuring.” No offense but that inclination to seek a secure refuge or landing place should be thoroughly investigated. That is how deep our conditioning is.

Like the Ḍākārṇava Tantra says:

Everyone is confused by illusion; but the wise are liberated by illusion.

Seeing that this world - this so-called “physical reality” - is an illusion, is the doorway to liberation. Reifying this illusory reality as stable and real (vāstu) will seed the causes for the continual cycle of suffering.

There are two obscurations that prevent us from attaining buddhahood. These two obscurations must be eliminated to attain buddhahood. The first, the afflictive obscuration, is the perception of a self. The second, the cognitive obscuration, is the perception of an real external physical reality. Buddhas have eliminated both of these obscurations, they do not perceive a physical reality.

From Rongzom:

Moreover, the way [a buddha] knows and sees is not like holding [entities] to be substantial. He knows and sees [them] as an illusion. Likewise, the Dharmasaṃgītisūtra states:

For example, some magicians attempt to free a magically created [being by removing its magical power]. Since they already know [that it is an illusion], they face no obstructions to [correctly perceiving] that illusion-[like being]. Likewise, the wise, who are fully awakened, perceive the three [realms of] existence to be illusion-like.

Also, in the Pitāputrasamāgamasūtra it is stated:

Because a magician knows the magical apparition created [by him] to be an illusion, he is not confused by it. You, [too,] see the entire world ('gro ba: jagat) in this way. [I] pay homage and praise to one who sees everything [in this way].

Further, some say: The fully awakened one possesses the knowledge of the absolute, [namely], the so-called gnosis of knowing [phenomena] as [they actually] are, but does not possess the knowledge of the conventional, the so-called gnosis of knowing [phenomena] to the full extent. It is not that something knowable (mkhyen rgyu yod pa) is not known [by a buddha]. But since conventional knowable [phenomena] are non-existent, there is no gnosis of perceiving them [either]. How is it that conventional [phenomena] are non-existent? Conventional [phenomena] appear to ordinary beings as they are, namely, caused [in their case] by defiled ignorance (nyon mongs pa can gyi ma rig pa). They appear to the three [types of] nobles (i.e., śrāvaka saints, pratyekabuddhas, and bodhisattvas) as they are, namely, caused [in their case] by undefiled ignorance (nyon mongs pa can ma ying pa'i ma rig pa). It is, for example, like the appearance of strands of hair and [other] 'floaters' (rab rib: timira) to a [person] suffering from an eye disease. [Immediately] after the Diamond-like Samadhi [has arisen in him], a buddha discards [even undefiled] ignorance, and sees true reality, in that [he] does not see any phenomena. Therefore, these deceptive conventional [phenomena] do not exist in a buddha['s field of perception].

Also, Sneezlebee’s assessment that “consciousness dreaming the body” is a “new age” view is really not the case. This is implied in buddhadharma, and stated explicitly in some systems, the Khandro Nyinthig says:

To sum it all up, ignorant attachment to dualistic appearances assembles the rtsal of gnosis (jñāna - pristine consciousness) into the [four material] elements, and forms the body in actuality.