I think the best way to start out here is to define what “sanctified” means.  Sanctified (hagiazō in the Greek language) means to make holy or consecrated.  The Bible describes three “phases” of sanctification – positional, progressive, and final.  Let’s take a look at each of them.

POSITIONAL SANCTIFICATION:  As believers, when the Holy Spirit brings us to life spiritually, we are, at that moment, set apart as holy and saved from the penalty of sin (Jesus took our penalty and gave us His righteousness). 

• It is once and for all.  (Hebrews 10:10 –  “...we have been sanctified through the offering of the body of Jesus Christ once for all.”
• We are made alive. (Ephesians 2:5 – “No longer dead in trespasses, we are made alive together with Christ.”)
• We are citizens of a new kingdom.  (Colossians 1:13 – “He has rescued us from the dominion of darkness and brought us into the kingdom of the Son he loves”.
• We are members of the body of Christ (1 Corinthians 12:17 – “Now you are the body of Christ and individually members of it.”) 
• We are God’s own possession.  (1 Peter 2:9 – “But you are a chosen race, a royal priesthood, a holy nation, a people for His own possession, that you may proclaim the excellencies of him who called you out of darkness into his marvelous light.”)
• We are a new creation.  (2 Corinthians 5:17 – “Therefore, if anyone is in Christ, he is a new creation. The old has passed away; behold, the new has come.”)
• We are dead to sin.  (Romans 6:2 – “By no means! How can we who died to sin still live in it?”)
• We are now partakers of the divine nature.  (2 Peter 1:4 – “by which he has granted to us his precious and very great promises, so that through them you may become partakers of the divine nature, having escaped from the corruption that is in the world because of sinful desire.”) 

Positional sanctification is NOT dependent on our feelings; it is a FACT of salvation, even though our actions on earth do not always align with our position in heaven.  Which segues nicely into the next “phase” of sanctification – progressive.

PROGRESSIVE SANCTIFICATION:  Progressive sanctification (the effect of obedience to the Word of God in your life) is the evident result of our positional sanctification.  God guides us in our progressive sanctification.  Just like we were powerless to be positionally sanctified, without the Holy Spirit, we are also powerless to be progressively sanctified (2 Corinthians 3:18).

• This is a lifelong process of becoming more like Christ as we cooperate with the Holy Spirit and yield to His control. (Roman 8:29 – “For those whom he foreknew he also predestined to be conformed to the image of his Son, in order that he might be the firstborn among many brothers.)
• The Holy Spirit uses the Word of God to progressively sanctify us.  (John 17:17 – “Sanctify them in the truth; Your word is truth.”)
• We are called to be holy in all our conduct (1 Peter 1:15-16 – but as he who called you is holy, you also be holy in all your conduct, since it is written, “You shall be holy, for I am holy.”) – (Conduct includes your habits, your standards, how you function, what your moral code is based on).
• We are to walk in the good works that God has prepared for us ahead of time.  (Ephesians 2:10 – “For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them.”)   (Walk – peripateō – means to make one’s way, progress; to make due use of opportunities)

FINAL SANCTIFICATION: Another name for this is glorification.  

• What we “will be” has not yet appeared, but it’s coming! (1 John 3:2 – “Beloved, we are God’s children now, and what we will be has not yet appeared; but we know that when he appears we shall be like him, because we shall see him as he is.”)
• One day we will be sanctified completely.  (1 Thessalonians 5:23 – “May the God of peace himself sanctify you completely, and may your whole spirit and soul and body be kept blameless at the coming of our Lord Jesus Christ”.)
• When Christ returns, my sanctification (personal glorification) will be complete.  (Colossians 3:4 – “When Christ, who is your life, appears, then you also will appear with him in glory”.) (1 John 3:2 – “We know that when Christ appears, we shall be like him, for we shall see him as he is”.)
• This is the ultimate separation from sin.