"You were dead through the trespasses and sins in which you once lived, following the course of this world, following the ruler of the power of the air, the spirit that is now at work among those who are disobedient. All of us once lived among them in the passions of our flesh, following the desires of flesh and senses, and we were by nature children of wrath, like everyone else. But God, who is rich in mercy, out of the great love with which he loved us even when we were dead through our trespasses, made us alive together with Christ—by grace you have been saved—and raised us up with him and seated us with him in the heavenly places in Christ Jesus, so that in the ages to come he might show the immeasurable riches of his grace in kindness toward us in Christ Jesus. For by grace you have been saved through faith, and this is not your own doing; it is the gift of God—not the result of works, so that no one may boast. For we are what he has made us, created in Christ Jesus for good works, which God prepared beforehand to be our way of life.
So then, remember that at one time you Gentiles by birth, called ‘the uncircumcision’ by those who are called ‘the circumcision’—a physical circumcision made in the flesh by human hands—remember that you were at that time without Christ, being aliens from the commonwealth of Israel, and strangers to the covenants of promise, having no hope and without God in the world. But now in Christ Jesus you who once were far off have been brought near by the blood of Christ. For he is our peace; in his flesh he has made both groups into one and has broken down the dividing wall, that is, the hostility between us. He has abolished the law with its commandments and ordinances, so that he might create in himself one new humanity in place of the two, thus making peace, and might reconcile both groups to God in one body through the cross, thus putting to death that hostility through it. So he came and proclaimed peace to you who were far off and peace to those who were near; for through him both of us have access in one Spirit to the Father. So then you are no longer strangers and aliens, but you are citizens with the saints and also members of the household of God, built upon the foundation of the apostles and prophets, with Christ Jesus himself as the cornerstone. In him the whole structure is joined together and grows into a holy temple in the Lord; in whom you also are built together spiritually into a dwelling place for God" (Ephesians 2:1-22).
Ephesians is a late letter, written when Paul was imprisoned in Rome (see 3:1 and 4:1). It's not specifically written to the church in Ephesus, but as a "circular letter" to be copied and passed among the various churches. (When his writings were collected after his death, it was probably the Ephesus church that provided this particular copy.)
Chapter 2 is concerned with the blessings and benefits of belief in the teachings of Jesus Christ. He reminds his readers that their lives have been transformed, and solely through the grace of God. They had previously walked in ignorance and sin—not because they were evil, but because they hadn't known the spiritual Truth that Jesus shared. In Colossians, written at about the same time, Paul calls this Truth "Christ in you, the hope of glory" (Col. 2:27). If they fully grasp this Truth, and fully accept it, their lives will be transformed.
In this passage, we find one of the central teachings of Paul's ministry: the priority of faith and grace instead obedience and good acts. "For by faith you have been saved through faith" (2:8). Previous religious teachings had insisted that "salvation" from our human limitations was a question of obedience to the Law and acts taken in the course of a life. Not so to Paul. We don't need to "earn" God's favor; it is ours simply as a response to our faith in it. It is after faith and grace have transformed our consciousness that we will find ourselves doing good works and following the Law—not because we have to, but because we choose to. The emphasis here, I think, is on realizing and expressing who we truly are—expressions of the same Christ power that Jesus demonstrated and taught.