Liquidation is an idiosyncratic term in music theory. This article considers its origins in the writings and teaching of Arnold Schoenberg. Tracing its history uncovers the resonances that it held for him and refines our understanding of the term. Paying close attention to translations by Schoenberg himself, members of his circle, and later commentators, the author examines liquidation alongside “dissolution” (Auflösung), “obligations,” and “obligatory” forms. While the received interpretation of the term emphasizes the elimination or removal of features, the sources reveal a richer and more multidimensional concept, one that betrays its origins in chemistry in depicting the transformation of states, for example, from solid to liquid. Acknowledgment of the range of influences embodied in Schoenberg’s choice of the term liquidation represents a first step to unlocking a fuller comprehension not only of its technical aspects but also of its central role in the shaping of musical form.