Abstract. Motivated by the recent work due to Warnaar (2005), two new and elementary proofs are presented for a very useful q-difference equation on eight shifted factorials of infinite order. As the common source of theta function identities, this qdifference equation is systematically explored to review old and establish new identities on Ramanujan's partition functions. Most of the identities obtained can be interpreted in terms of theorems on classical partitions.2000 Mathematics Subject Classification. Primary 05A30. Secondary 14K25.For two indeterminates q and z with |q| < 1, the q-shifted factorial of infinite order and the theta function are defined respectively byTheir product forms are abbreviated respectively asRecently, a very useful q-difference equation on eight shifted factorials of infinite order was established in [11, Theorem 1.1], where its applications to Ramanujan's congruences on the partition function are investigated. The purpose of this paper is twofold. First, we shall present two new and elementary proofs for that q-difference equation, inspired by Warnaar's recent paper [23]. Second, we shall explore its applications along another direction: theta function identities. We shall systematically review old and establish new theta function identities from that q-difference equation, which turns out to be a natural source for theta function identities.The contents of the paper will be as follows. The first section will enunciate the q-difference equation on shifted factorials and its main implications. The two new and elementary proofs will be presented in the second section. The third section will be dedicated to its applications to various theta function identities.