Using soft x-ray absorption spectroscopy and magnetic circular dichroism at the Co-L2,3 edge we reveal that the spin state transition in LaCoO3 can be well described by a low-spin ground state and a triply-degenerate high-spin first excited state. From the temperature dependence of the spectral lineshapes we find that LaCoO3 at finite temperatures is an inhomogeneous mixed-spinstate system. Crucial is that the magnetic circular dichroism signal in the paramagnetic state carries a large orbital momentum. This directly shows that the currently accepted low-/intermediate-spin picture is at variance. Parameters derived from these spectroscopies fully explain existing magnetic susceptibility, electron spin resonance and inelastic neutron data.PACS numbers: 71.28.+d, 71.70.Ch, 78.70.Dm LaCoO 3 shows a gradual non-magnetic to magnetic transition with temperature, which has been interpreted originally four decades ago as a gradual population of high spin (HS, t 4 2g e 2 g , S = 2) excited states starting from a low spin (LS, t 6 2g , S = 0) ground state [1,2,3,4,5,6,7,8]. This interpretation continued to be the starting point for experiments carried out up to roughly the first half of the 1990's [9,10,11,12]. All this changed with the theoretical work in 1996 by Korotin et al., who proposed on the basis of local density approximation + Hubbard U (LDA+U) band structure calculations, that the excited states are of the intermediate spin (IS, t 5 2g e 1 g , S = 1) type [13]. Since then many more studies have been carried out on LaCoO 3 with the majority of them [14,15,16,17,18,19,20,21,22,23,24,25,26,27] claiming to have proven the presence of this IS mechanism. In fact, this LDA+U work is so influential [28] that it forms the basis of most explanations for the fascinating properties of the recently synthesized layered cobaltate materials, which show giant magneto resistance as well as metal-insulator and ferroferri-antiferro-magnetic transitions with various forms of charge, orbital and spin ordering [29,30].In this paper we critically re-examine the spin state issue in LaCoO 3 . There has been several attempts made since 1996 in order to revive the LS-HS scenario [31,32,33,34,35], but these were overwhelmed by the above mentioned flurry of studies claiming the IS mechanism [14,15,16,17,18,19,20,21,22,23,24,25,26,27]. Moreover, a new investigation using inelastic neutron scattering (INS) has recently appeared in Phys. Rev. Lett.[36] making again the claim that the spin state transition involves the IS states. Here we used soft xray absorption spectroscopy (XAS) and magnetic circular dichroism (MCD) at the Co-L 2,3 edge and we revealed that the spin state transition in LaCoO 3 can be well described by a LS ground state and a triply degenerate HS excited state, and that an inhomogeneous mixed-spinstate system is formed. Parameters derived from these spectroscopies fully explain existing magnetic susceptibility and electron spin resonance (ESR) data, and provide support for an alternative interpretation of the INS [37]. C...