What does John 8:35 mean?

Jesus is explaining the enslaving nature of sin, as compared to the freedom He offers in salvation. Jesus has already claimed to be the one and only source of spiritual truth (John 8:12), and that accepting this truth would rescue a person from sin and spiritual slavery (John 8:31–32). In the prior verse, Jesus noted that those who habitually practice sin are slaves to sin—these are not people who have been "set free." In this verse, He draws out the distinction between a household servant and an actual son of the house.

Slaves—from the Greek term doula--meaning a "bondservant"—were the equivalent of employees in the ancient world. They lived in the master's house, and had a certain kind of relationship with the master. However, they were not actually part of the master's family. Eventually, these bondservants would leave, or be dismissed. Only the actual children of the master had a permanent right to live in the home. The classic example of this is found in Genesis 21, where Ishmael, Abraham's son through the servant Hagar, is dismissed from the home; his son Isaac, through his wife, remains. This, according to Jesus, applies to our spiritual relationship to God.

Specifically, Jesus is referring to the crowd's earlier claim to being the children of Abraham. As Jesus will soon point out, His critics may be "in the house" of Abraham, but they are not really "children" of Abraham, since they are not spiritually part of God's family. Sooner or later, as with any other "slave," they will find themselves cast out.