To Catholics, justification is "a translation, from that state wherein man is born a child of the first Adam, to the state of grace, and of the adoption of the sons of God, through the second Adam, Jesus Christ, our Savior" (Council of Trent, Decree on Justification chapter 4), including the transforming of a sinner from the state of unrighteousness to the state of holiness. Sonship, becoming a child of God, is the overarching theme.
Essential Catholic Teaching on Justification
That is the essential teaching in a nutshell.
Creation and Salvation: A Family Affair
Christians believe that the one true God --the Creator of all things, the God of Abraham, Isaac, and Jacob-- is an eternal divine Family, the holy Trinity: Father, Son, and Holy Spirit. The Father, Son, and Holy Spirit give themselves completely to each other in an eternal communion of love. This truth was revealed to men when Jesus Christ, God the Son, assumed a human nature and lived among us.
When God created the heavens and the earth, not of necessity but of His gracious generosity and love, He created men in His Own image, male and female. The first parents of humanity, commonly known as Adam and Eve, were created in the image of the life-giving Trinity, having a supernatural capacity for interpersonal communion and love. They were created to reflect God's inner life, the self-giving love of the holy Trinity, and thus give glory to God.
But the first parents of the human family chose, through sin, to spurn the love and vocation which God had so generously given them. The first parents became runaways, and as a consequence their children are also deprived of home and inheritance, interpersonal communion and self-giving love. Humans are aliens to the life they were created to lead, spiritually dead.
The most holy Trinity, not desiring that humans should persist in this state of spiritual deprivation, has graciously chosen to save people from their sin and death. Even more, God has chosen to give humans new life and transform them into members of the divine Family, to share in the interpersonal communion of the Trinity. This is the good news we have received from the Apostles: the eternal Father graciously transforms men, in Jesus Christ His eternal Son, by the power of the Holy Spirit, into His own beloved sons and daughters. The powerful life-giving love of the holy Trinity knows no bounds.
It is essential to understand creation and salvation in incarnational, familial, and Trinitarian terms. The Incarnation and the Trinity are the central doctrines of the Christian Faith --we cannot be true to Christ's revelation without them.
Four Points Explaining a Catholic Vision of Justification
1. Original Sin
Catholics believe that the first sin of humanity's original parents (known as Adam & Eve) has caused bad consequences for all humans. Newborns have not committed any personal sins, but they are born spiritually dead, lacking the grace and holiness God intended human persons to have. This consequence of the first sin is called "original sin" and the spiritually dead state is sometimes called "in Adam."
As long as a person is spiritually dead, he can do nothing spiritually beneficial. He may have a kind of faith in God and even do good works, but it does not lead to divine communion. He is dead, powerless, helpless. There is nothing humans can do to save themselves from this state worse than death. Unless God does something to make humans spiritually alive, they will end up in hell. Human persons can only be saved by God the Father in Jesus Christ by the power of the Holy Spirit.
2. Initial Justification
To remedy #1, God the Father makes people alive in Jesus Christ by the power of the Holy Spirit. (This is called "regeneration," "rebirth," being "born from above," "born of God," etc.) Incorporated into Jesus Christ, the only Son of God by nature, humans truly become children of God by grace. As new members of Jesus' body, Christians are infused with his righteousness and holiness, which remove and dispel all sin and make them totally spotless and pure. (This is often called "initial justification" and "initial sanctification.") Filled with the gift of the God's Holy Spirit, who dwells within Christians as members of Christ, they are given the supernatural gifts of justifying faith, hope, and love, gifts which infinitely surpass our their natural human powers.
As the state of spiritual death was called "in Adam," the state of the regenerate children of God is called "in Christ." In Christ, as members of his Body, Christians participate in his death and resurrection. Those made alive by the Spirit are also said to be "in sanctifying grace."
Those who have been regenerated and justified by God are his children, pure and holy. They have been saved by God's grace and are being saved by God's grace. They are made ready by God for heaven. If someone were to die immediately after his regeneration and justification, like the thief on the cross, he would be in heaven: communion with God.
While Catholics can and do use legal or "forensic" terms to describe justification, they do not think the legal terms encompass the whole reality. Catholics do believe that God "declares" people righteous, but do not think this language goes far enough. Catholics believe that God actually makes people righteous, infusing them with the righteousness of Christ, when he declares them righteous. Christians were once guilty, but now they are truly innocent.
Here's an analogy to illustrate. Imagine a really dirty homeless man lying on the street. The imputation-only view of justification is like covering the dirty man with dazzlingly clean clothes, making him appear cleaner though he's still quite dirty. The infusion view is like taking the man, giving him a good scrubbing in the bath, and giving him clean clothes to wear. He doesn't just look cleaner, he is cleaner.
Catholics believe that a person actually begins Christian life spotless in Jesus Christ.
3. Progressive Justification
If a Christians is already pure, though, how does he grow in righteousness? Not qualitatively, since Christians been thoroughly purified in Christ, but (for lack of a better word) "quantitatively." It's a different dimension of righteousness.
Here is an analogy that may help. Imagine that you have a 6oz glass of sparkling pure water. It's impossible to improve your glass of water qualitatively, to make the water any purer. But suppose another person swaps your 6oz glass full of pure water for a 12oz glass full of pure water. Your glass of water has not improved qualitatively, but quantitatively: it has a greater capacity for pure water.
This is what progressive justification is like. As a Christian grows and matures in Christ, empowered by the grace of the Holy Spirit, he has a greater and greater capacity for Christ's righteousness and holiness, a greater capacity to love.
Some do not recognize this "quantitative" dimension of justification or sanctification. "If we are already pure," they ask, "how can we grow?" This leads to bad misunderstandings of Catholicism. People who do not understand frequently ask questions like "how many good works do you have to do to get into heaven?" This question does not make sense to a Catholic. The regenerate man living in Christ through faith by the power of the Holy Spirit is already pure and righteous, already being saved, already on his way to heaven. His good works, empowered by grace, increase his capacity to receive God's life, not his purity.
4. The Possibility of Mortal Sin
If Christians, empowered by the grace of the Holy Spirit dwelling within us, do not personally exercise the gifts of justifying faith, hope, and love, they do not grow and mature in Christ. If they are not growing and maturing in Christ, Christians atrophy. If this atrophy persists, they are being unfaithful to the grace of God, spurning the grace of God, committing spiritual suicide. Catholics do believe it is possible to spurn the grace of God through sin and become, in Paul's words, "worse than an unbeliever." But fallen Christians may be saved if, by the grace of God, they repent and are reconciled. God is generous Love, and wants to save us even more than we ourselves want to be saved.
The problem of sola fide.
All Christians --Catholic, Protestant, and Eastern Orthodox-- agree that humans can only be saved by God the Father in Jesus Christ by the gracious power of the Holy Spirit. Human persons can only be saved by grace, and they can only be saved in Jesus Christ. There is no other way. Everyone agrees about this.
Since the Reformation, Protestants have used the phrase "justification by faith alone." What does it mean? Do Catholics believe in justification by faith alone?
Catholics believe there are many problems with claiming people are "justified by faith alone." Perhaps the biggest is the fact that the formula does not actually appear in scripture, except in one verse which says people are "not justified by faith alone" (James 2:24). Another problem with the formula is that different Protestants mean different things by it. For Luther, the phrase meant only our faith, and faith by itself, justifies. But for Calvin, it meant something different: that people are only justified through faith, but not a faith that is alone; only if a man has the faith given by God can he be justified. So Protestants don't necessarily agree about the meaning of "justification by faith alone," even though almost all of them use the phrase.
And Catholics? Catholics can and do agree with the "justification by faith alone" formula according to the Calvinist meaning above. The just shall live by faith; without faith it is impossible to please God. Personal faith is necessary for salvation. It is only the Lutheran usage which may cause problems. Even so, Catholics and Lutherans have found much agreement on the subject of justification. Mere belief without love is dead, it cannot save. Only faith working in love, faith and love empowered by God's grace, can save.
The Catechism of the Catholic Church on Justification
"Joint Declaration on Justification" by the Lutheran World Federation and the Catholic Church
"It Works for Me: The Church's Teaching on Justification" by Catholics United for the Faith
"Persevering to the End: The Biblical Reality of Mortal Sin" by Catholics United for the Faith
"A Lutheran's Case for Roman Catholicism" by Robert C. Koons (then a Lutheran)
"Sola Gratia, Solo Christo: The Roman Catholic Doctrine of Justification" by Richard A. White (then a Calvinist)
"Does the Bible Teach Sola Fide?" by Bryan Cross (former Calvinist)
"A Reply from a Romery Person" by Bryan Cross (former Calvinist)
"Justification: The Catholic Church and the Judaizers in St. Paul’s Letter to the Galatians" by Bryan Cross (former Calvinist)
Ecumenical Council of Trent Session 5: Original Sin
Ecumenical Council of Trent Session 6: Justification
Second Regional Council of Orange (6th century)