The ideas of the Gaia hypothesis from the 1960s are today largely included in global ecology and Earth system sciences. The interdependence between biosphere, oceans, atmosphere and geosphere is well-established by data from global monitoring. Nevertheless the theory underlying the holistic view of the homeostatic Earth has remained obscure. Here the foundations of Gaia theory are examined from the recent formulation of the 2nd law of thermodynamics as an equation of motion. According to the principle of increasing entropy, all natural processes, inanimate just as animate, consume free energy, the thermodynamic driving force. All species, abiotic just as biotic are viewed as mechanisms of energy transduction for the global system to evolve toward a stationary state in its surroundings. The maximum entropy state displays homeostasis by being stable against internal fluctuations. When surrounding conditions change or when new mechanisms emerge, the global system readjusts its flows of energy to level newly appeared gradients. Thus, the propositions of Gaia theory and holistic understanding of the global system are recognized as consequences of thermodynamic imperatives.