Before identifying the “dead in Christ,” we should note the context in which this phrase is found. The immediate context is 1 Thessalonians 4:13–18, which deals with the question of what will happen at the return of the Lord Jesus. Paul’s readers were concerned that when Christ returns, those who have died prior to then would somehow miss out. The primary purpose of this passage is to comfort those believers who have lost believing loved ones.
The message of this passage is a message of hope. Christians have hope that unbelievers do not have when they lose loved ones. There is hope beyond the grave for Christians, and part of that hope is that, at the return of Christ, those who have already died “will rise first.” After that, Christians who are still alive will be transformed. Both groups will be “caught up” and will meet the Lord in the air. Paul closes this section with an admonition to encourage others with this hope.
In this passage, Paul uses the common euphemism of sleep to refer to those who have died in Christ, i.e., believers. Paul wants to comfort his readers that those Christians who have died prior to the return of Christ will not miss out on anything. That is why he opens this section by saying, “But we do not want you to be uninformed, brothers, about those who are asleep, that you may not grieve as others do who have no hope” (v. 13).
So to answer the question, the dead in Christ are those believers who have died prior to the second coming of Christ. (Note, whether 1 Thessalonians 4 is referring to the second coming or the rapture is a matter of debate.) Believers, whether dead or alive, belong to Christ. We get similar language from the apostle in his first letter to the Corinthians when he writes, “But each in his own order: Christ the first fruits, then at his coming those who belong to Christ” (1 Corinthians 15:23). The dead in Christ applies not only to Paul’s original audience, but to all believers who have died in what can be termed the “inter-advental” period, or the time between the first and second comings of Christ.
Another question that may come up in this context is what happens to believers when they die? Certainly, Paul uses sleep to refer to their state, but does this mean that believers experience (for lack of a better word) an unconscious sleep-like state until the future resurrection? Those who advocate this position, called soul sleep, base it on passages such as 1 Thessalonians 4:13–18. But it should be noted that “sleep” as used here is euphemistic. It is not meant to convey actual sleep. In fact, the experience of the believer after death and before the end of the age when Christ returns is conscious, blissful communion with the Lord. Paul hints at this in 2 Corinthians 5:6–8 and Philippians 1:23.
At death, the body lies in repose in the grave awaiting the resurrection of the last day, but the soul goes to be at home with the Lord. This is the doctrine of the intermediate state. Believers experience in a provisional sense the rewards that await them in heaven, while unbelievers experience a taste of their eternal torment in hell (Luke 16:19–31).