The aim of this article is to present the understanding of Scripture in Martin Luther’s theology and in Lutheranism. The first part outlines how Luther viewed Scripture and explained its central significance in Christian life. The second part is devoted to the issue of biblical inspiration from a Lutheran perspective, starting from an exegesis of the classic New Testament texts: 2 Tim 3:14–17; 2 Pet 1:19–21 and Rom 15:4. The third part critiques the claim of the inerrancy of Scripture, which plays a significant role in Roman Catholic theology and fundamentalist evangelical currents. The article demonstrates that the central significance for understanding the role of Scripture lies in its impact on the human person through the Holy Spirit. Inspiration takes place in the recipient, the reader, when the Holy Spirit awakens faith within him/her. Thus, the Lutheran doctrine of Scripture boils down to (existential) hermeneutics. From the Lutheran perspective the thesis of the inerrancy of Scripture proves to be theologically inappropriate. The Lutheran approach to Scripture is dialectical in nature: Scripture is a sovereign authority, yet at the same time it is subject to criticism based on a Christological criterion. Critics of the sola scriptura mistakenly regard it as a formal criterion, whereas it is a material rule referring to what is proclaimed and what draws people to Christ.