ואף שבשניהם אור אחד שוה בבחינת הסתר פנים

True, in terms of the “concealment of Countenance” i.e., the degree to which the “Countenance,” the inner aspect of the divine life-force, is concealed, the light i.e., the divine creative life-force is the same in both [body and soul] — it is concealed equally in both.

ולבושים שוים שהאור מסתתר ומתעלם ומתלבש בהם

The garments in which the light hides, conceals and clothes itself are identical [in body and soul].

כי שניהם הם מעולם הזה, שבכללותו מסתתר בשוה האור והחיות שמרוח פיו יתברך

For both [body and soul] are of this world where, throughout the world and all its creatures (spiritual as well as physical), the light and life-force issuing from “the breath of [G‑d’s] mouth” are equally concealed,

בבחינת הסתר פנים, וירידת המדרגות בהשתלשלות העולמות ממדרגה למדרגה בצמצומים רבים ועצומים

by “concealment of the Countenance,” and [by] the descent of the life-force from level to level, by means of numerous powerful tzimtzumim (contractions) through the various levels [constituting] the chain-like succession of worlds,

עד שנתלבש בקליפת נוגה, להחיות כללות עולם הזה החומרי

finally clothing itself in kelipat nogah, in order to give life to the totality of this material world.

The Alter Rebbe has here described the process whereby the divine life-force descends from its lofty, G‑dly origin to the point where it creates and gives life to physical matter; i.e., from “the breath of G‑d’s mouth” — a reference to Malchut of the World of Atzilut — to the World of material Asiyah.

He defines various steps in this process: (1) “descent from level to level”; (2) “numerous tzimtzumim”; (3) “powerful tzimtzumim”; (4) “clothing itself in kelipat nogah.”

Let us examine them individually:

(1) “Descent from level to level:” To reach down to the level of Asiyah, the life-force must first descend form the World of Atzilut to Beriah, thence to Yetzirah, and finally to Asiyah. Within each of these Worlds there are many levels, and the life-force must descend through them all before reaching the next lowest World.

(2) “Numerous tzimtzumim:” Each descent of the life-force entails a “contraction” of the light and life-force, lessening its intensity.

But descent and tzimtzumim alone, no matter how numerous, will still not make possible the creation of a physical being; the divine life-force would still be at a level where anything created by it would be a spiritual being, albeit of a lower grade of spirituality. The creation of physical matter presupposes another condition, viz.:

(3) “Powerful tzimtzumim:” I.e., tzimtzumim which entirely change the character of the life-force (and not only its intensity), to the point where it can create and give life to material beings. But even this type of tzimtzum cannot produce a world like ours, in which it is not apparent that G‑d is the Creator, and where, in fact, G‑d’s creations can be used in defiance of His Will. This is achieved only when —

(4) “The life-force… clothes itself in kelipat nogah” (and thereby also in the other kelipot, as will soon be explained). As defined in the first chapter of Tanya, kelipat nogah is a mixture of good and evil. Therefore, whatever receives its G‑dly life-force through the veil of kelipat nogah (in which the life-force is clothed) can be utilized either for a holy purpose, in serving G‑d’s Will through performing a mitzvah, or for an unholy purpose, in violating His Will through a sinful act.

In summary: Through many descents and powerful tzimtzumim, the G‑dly life-force clothes itself in kelipat nogah, and thereby gives life to all the creatures of this world.