The third foundation of mindfulness is mindfulness of mind or mental states, which includes emotions and thoughts. Awareness of the quality of mental states is integral to understanding what drives our behavior. When our actions are unexamined and unskillful, they are the primary cause of suffering for ourselves and others.
How does mindfulness of mental states look in practice? In meditation, when we notice that our attention is being drawn again and again by some external or internal stimulus, we can observe the mental states that arise. We may see that thoughts passing through the mind have a judging quality, that comparison is happening, or that the thoughts are constricted, or rapid, or intense. We may also notice that emotions accompany these thoughts and we can label them: longing is here, frustration, sadness etc. Finally, urges to action may arise and we can sit with these impulses (rather than acting upon them) in order to understand them better.
Over time we develop insight into the habit patterns and states of mind that lead to afflictive emotion and unskillful actions. For most of us the pattern goes something like this: contact with internal or external stimuli leads to pleasant, unpleasant, or neutral feelings, which then lead to thoughts and emotions (mental states), which then lead to desire (craving) or aversion, which ultimately leads to action. When we are on automatic pilot and we act on these habit patterns, we are running blindly and suffering may result. The insight gained from mindfulness of mental states gives us space to make choices that decrease suffering for ourselves and others. We become more aware of, but less swept away by the activities of the mind.
Taking time for stillness and silence in which we can non-judgmentally observe thoughts and emotions also allows us to notice mental states that tend to accompany pleasant feelings. We see that when compassion, patience, gratitude, or generosity are the dominant state of mind, there is a pleasant feeling that arises. This motivates us to turn more and more toward these particular mind states, which is ultimately beneficial to ourselves and to others. This is when the journey on the path to liberation from suffering really gets underway.