Martin Luther wrote...

In the whole Bible there is hardly another chapter which can equal this triumphant text.

Therefore (3767) (oun) on the basis of the previous truths, Paul now introduces us to the practical benefits of salvation. Note the connection with the last word of Romans 4 - Justification (note Ro 4:25). It is only because of Christ’s work of justification that peace and other blessings follow.

Paul reaches back to the (see notes Romans 4:24; 25) contents of chapter four—therefore HAVING BEEN justified, not by works (Romans 4:1-8), not by ordinances (see notes Romans 4:9; 10; 11; 12), not by obedience to the law (Romans 4:13-25), but by faith, we have peace. The first three never give peace to the soul. Only faith in Christ brings peace.

Paul's argument in the preceding section can be summarized as ....

The need for justification: All men are sinful and guilty before God (Romans 1-3)

The way of justification: by grace through faith based on the redemptive work of Christ on the Cross (Romans 3:24-28).

The illustration of justification: the example of Abraham (Romans 4).

The New Unger’s Bible Handbook, Merrill F. Unger, Revised by Gary N. Larson, Moody Press, Chicago, 1984, p. 479

Paul is careful to emphasize that justification is an assured fact before going on to show what is involved in it. Paul has shown us that even Abraham had to be justified and that man is guilty before God and man cannot in any way justify himself. Beginning in Romans 5 Paul begins to show us "the other side" of what it means to be justified and expounds an incredible list of blessings and benefits that come spilling out of the cornucopia of justification.

As an aside, you may have heard someone speak of the need to receive "a second blessing" or "a second work of grace" referring to what they think is a post-salvation experience. It is not that believers lack a second blessing experience but that most of us fail to realize how blessed we already are in Christ. We fail to "claim" or lay hold of the spiritual riches that are ours. We fail to "possess our possessions". We who are children of the King need to stop living like "spiritual paupers".

Notice the Pauline pattern of presentation of the gospel - the sinner must see their need first  (Romans 1-4) The unsaved must know why they even need to be saved!. Once they see their desperate need and receive Christ as Lord and Savior by grace through faith, then Paul explains the benefits accompanying salvation (Romans 5). How often the gospel is made as attractive as possible by showing the unsaved person all the wonderful benefits that will be his if he trusts Christ: "If you trust the Lord you will have peace with God!" The problem with this backwards approach is that the sinner does not come to understand why they need to have peace with God. The unsaved person must first be shown from the Scriptures that in his sinful condition he is an enemy of God, fighting against God in rebellion and that God’s wrath is being revealed from heaven against him. (Click here and scroll down to the enlightening discussion on presentation of the gospel)

Ray Stedman writes:

Romans 5 is a graduation exercise. It takes us from the elementary grades of Christian life into high school. Up to this point in the book of Romans, we have been dealing with BIRTH TRUTHS -- the elementary, introductory truths of the Christian faith. But at this point in the book we learn of the existence of GROWTH TRUTHS -- the way to maturity and power, and the way to be effective in Christian service. Now, wherever the Christian church is weak (and it is weak in many places), and wherever Christians are weak individually, it's because they have never graduated into the High School of the Holy Spirit -- they are still "babes in Christ" {1Cor 3:1}, no matter how long they have been Christians. Sometimes you can find "babes in Christ" who have been Christians 15, 20, or even 40 years, and it is because they have never come into this high school truth of the Holy Spirit: They keep learning over and over again the same old truths about salvation in Christ that are presented in these early chapters (wonderful as they are), and never go on -- never graduate. (excerpt from Faith Faces Life)

W E Vine observes that

the fifth chapter shows what we have THROUGH CHRIST, while the sixth shows us what we are IN CHRIST. "THROUGH CHRIST" is the keynote of chapter five. This chapter unfolds the subjects of the effects of the death and resurrection of Christ, all being based on the doctrine of [see notes Romans 3:21; 22; 23; 24; 25; 26]. The opening sentence of the chapter is at once deduced from the closing statements of chapter four. The leading thought, "THROUGH our Lord Jesus Christ," is expressed at both the beginning and end of the first part of the chapter (v1-11), and at the end of the second part (Romans 5:21 [note]). (Vine, W. Collected writings of W. E. Vine. Nashville: Thomas Nelson )

Romans is a book of logic, and so is a book of “therefore's.” We have the “therefore” of condemnation in Romans 3:20 [note], justification in Romans 5:1, no condemnation in Romans 8:1 (note), and dedication in Romans 12:1 (note).

In presenting his case, Paul has proved that the whole world is guilty before God, and that no one can be saved by religious deeds, such as keeping the Law. He has explained that God’s way of salvation has always been “by grace, thru faith” (see notes Ephesians 2:8; 2:9), and he has used Abraham as his illustration. If a reader of the letter stopped at this point, he would know that he needed to and could be saved. But there is much more the sinner needs to know about justification by faith. Can he be sure that it will last? How is it possible for God to save a sinner through the death of Christ on the cross? Romans 5 is Paul’s explanation of the last two words in Romans 4:25 [note]: “our justification.” He now explains two basic truths: the BLESSINGS of our justification (Ro 5:1-11), and the BASIS for our justification (Ro 5:12-21). Our justification is not simply a guarantee of heaven, as thrilling as that is, but it is also the source of tremendous blessings that we enjoy here and now. Paul's second purpose is to assure his readers that justification is a lasting thing. His Jewish readers in particular would ask,

Can this spiritual experience last if it does not require obedience to the Law? What about the trials and sufferings of life? What about the coming judgment?

HAVING BEEN JUSTIFIED BY FAITH: Dikaiothentes (APPMPN) oun ek pisteos: (Ro 5:9,18; 1:17; 3:22,26, 27, 28,30; 4:5,24,25; 9:30; 10:10; Hab 2:4; Jn 3:16, 17, 18; 5:24; Acts 13:38,39; Gal 2:16; 3:11, 12, 13, 14,25; 5:4, 5, 6; Phil 3:9; Jas 2:23, 24, 25, 26)

Having been justified (1344) (dikaioo from díkaios = just, righteous -  the same root for words translated righteous, righteousness, justification, just, justifier) defines the act of declaring one not guilty. It means to pronounce and treat as righteous. It is not as some have taught a "process".

The aorist tense identifies the justification as a one time event in the past when these believers were declared legally not guilty (Click for table on past tense salvation). Justification is not something that is going on now; it is something that happened and was completed the moment you were saved.

The passive voice indicates this declaration came from an outside Source, in this case God Himself. They were acquitted of the charges against them, the charges having been transferred (imputed, reckoned) to the account of their Sin Bearer, the sacrificial, substitutionary Lamb of God.

Newell emphasizes how important a correct understanding of the verb tense is in this particular verse...

We must note at once that the Greek form of this verb "declared righteous, " or "justified, " is not the present participle, "being declared righteous, " but rather the aorist participle, "having been declared righteous, " or "justified." You say. What is the difference? The answer is, "being declared righteous" looks to a state you are in; "having been declared righteous" looks back to a fact that happened. "Being in a justified state" of course is incorrect, confusing, as it does, Justification and sanctification. "Whatsoever God doeth, it shall be forever." The moment you believed, God declared you righteous, never to change His mind: as David says, "Blessed is the man to whom the Lord will not reckon sin" (see note Romans 4:8). If therefore you are a believer, quote this verse properly, and say, "Having been declared righteous on the principle of faith I have"-these blessed fruits and results which are now to be recorded.

The Epistle takes on a new aspect in each chapter: in Chapter Three, Christ was set forth as a propitiation for our sins; in Chapter Four, Christ was raised for our justification; in Chapter Five, we have peace with God through Christ, a standing in grace, and the hope of the coming glory. (Romans 5)

Regarding dikaioo Wuest says that

"In simple, non-technical language it refers to the act of God removing the guilt and penalty of sin from a sinner who places his faith in the Lord Jesus as Saviour, and the bestowal of a positive righteousness, Jesus Christ, in Whom that believer stands a righteous person before God’s law for time and eternity, all this made possible by and based upon the satisfaction (hilasmos), propitiation) which Jesus Christ offered on the Cross as a complete payment of the penalty imposed by the law because of human infractions of that law, thus satisfying His justice, maintaining His government, and making possible the bestowal of mercy upon the basis of justice satisfied. This is a legal standing, and does not change nor affect the character of the person, which latter is changed by the work of the Holy Spirit in progressive sanctification Click here." (Wuest, K. S. Wuest's Word Studies from the Greek New Testament: Studies in the Vocabulary of the Greek New Testament: Grand Rapids: Eerdmans)

After listing his "glorious" human accomplishments, Paul declared

"more than that, I count all things to be loss in view of the surpassing value of knowing Christ Jesus my Lord, for whom I have suffered the loss of all things, and count them but rubbish in order that I may gain Christ, and may be found in Him, not having a righteousness of my own derived from the Law, but that (righteousness) which is through faith in Christ, the righteousness which comes from God on the basis of faith." (see notes Philippians 3:8; 3:9)

JUSTIFICATION = PAST TENSE
SANCTIFICATION = PRESENT TENSE
GLORIFICATION = FUTURE TENSE

Justification equates with what has been referred to as "Past Tense Salvation" versus Present tense salvation = sanctification and Future Tense Salvation = glorification.  Click here for study of the "Three Tenses of Salvation".

Justified by faith - This truth has permeated the previous chapters...

For in it (the Gospel) the righteousness of God is revealed from faith to faith; as it is written, "BUT THE RIGHTEOUS man SHALL LIVE BY FAITH." (See note Romans 1:17)

being justified as a gift by His grace through the redemption which is in Christ Jesus (See note Romans 3:24)

but for our sake also, to whom it will be reckoned, as those who believe in Him who raised Jesus our Lord from the dead

By faith - is literally out of (ek) faith, where the preposition ek signifies origin.

Faith (4102) (pistis) (see word study) is synonymous with trust or belief and is the conviction of the truth of anything, but in Scripture usually speaks of belief  respecting man's relationship to God and divine things, generally with the included idea of trust and holy fervor born of faith and joined with it. As faith relates to Christ it represents a strong and welcome conviction or belief that Jesus is the Messiah, through Whom we obtain eternal salvation and entrance into the Kingdom of Heaven. Stated another way, eternal salvation comes only through belief in Jesus Christ and no other way.

Haldane explains that...

It is not by faith, abstractly considered, that we are justified, nor even by faith in everything that God reveals. It is by faith in the Lord Jesus Christ. Even this phrase itself, namely, faith in the Lord Jesus Christ, is still elliptical, and supposes the knowledge of what is to be believed with respect to Christ. It is not believing in His existence, but believing on Him as revealed in the Scriptures, in His person and work. In the same manner as we have the phrase, “justified by faith,” we have the phrase, justified by the blood of Christ. As, in the former case, faith implies its object, so, in the latter, it is implied that we are justified by faith in the blood of Christ. The blood of Christ justifies by being the object of belief and of trust. (Haldane, R. An Exposition on the Epistle to the Roman. Ages Classic Commentaries)

True faith that saves one's soul includes at least three main elements (1) firm persuasion or firm conviction, (2) a surrender to that truth and (3) a conduct emanating from that surrender. In sum, faith shows itself genuine by a changed life. (Click here for W E Vine's similar definition of faith)

When missionary John Paton  was translating the Scripture for the South Sea islanders, he was unable to find a word in their vocabulary for the concept of believing, trusting, or having faith. He had no idea how he would convey that to them. One day while he was in his hut translating, a native came running up the stairs into Paton's study and flopped in a chair, exhausted. He said to Paton,

WE (continually) HAVE PEACE WITH GOD: eirenen echomen (1PPAI) pros ton theon: (Ro 5:10; 1:7; 10:15; 14:17; 15:13,33; Job21:21; Ps 85:8, 9, 10; 122:6; Isa 27:5; 32:17; 54:13; 55:12; 57:19-21; Zech 6:13; Lk 2:14; 10:5,6; Lk 19:38,42; Jn 14:27; 16:33; Acts 10:36; 2Cor 5:18, 19, 20; Eph 2:14, 15, 16, 17; Col 1:20; 3:15; 1Thes 5:23; 2Th 3:16; Heb 13:20; Jas 2:23)

Have (echo) is present tense so that this peace with God is our present and continuing possession.

Peace with God - speaks of the fact that we are no longer God's enemies but objects of His favor, an objective (in contrast to subjective) truth which is based on our position, something that is true forever because believers are now (positionally) in Christ, the Prince of peace. Peace with God expresses, as Friederich Philippi says, “not a state of mind, but a relationship to God.” It is a fact not a feeling. Peace with God is a repetitive theme in Scripture (Acts 10:36; Ro 8:6; 10:15; 14:17; Gal 5:22.

Isaiah phrases the relationship between righteousness and peace beautifully...

And the work of righteousness will be peace,
And the service of righteousness, quietness (Hebrew =- absence of war) and confidence forever. (Isaiah 32:17) (Comment: "This peace, then, is through Jesus Christ and His righteousness, which brings this quietness and assurance. He is the King of righteousness and Prince of Peace." Haldane)

Hodge writes that...

As a result of this reconciliation, we have conscious peace with God; that is, we no longer have either the constant censure of an unappeased conscience or the fear of divine anger.  (Hodge, Charles: Commentary on Romans. Ages Classic Commentaries  or Logos)

Now change the preposition from with to of and the meaning changes significantly. The Peace of God is that peace believers can experience moment by moment, as they walk in the light, their sins confessed and their consciences clean and clear. The inward peace that follows is important, but is not the primary thought here.

Peace with God - Romans 5:1 (note)

Peace of God - Philippians 4:7 (note)

Morris writes that...

The justified person is no longer tormented by questions of his relationship with God arising from the fact that he is a sinner. Sinner though he is, he is at peace with God because of what God has done for him. (Morris, L. The Epistle to the Romans. W. B. Eerdmans; Inter-Varsity Press)

Hodge adds that...

Conscience is only the reflection of his countenance, the echo, often feeble and indistinct, often terribly clear and unmistakable, of his judgment. Therefore subjective peace always accompanies faith in the love of God, or assurance of our justification. So although the apostle’s primary idea is that God is at peace with us, it is nevertheless true that inner tranquility of mind is the fruit of justification by faith.  (Hodge, Charles: Commentary on Romans. Ages Classic Commentaries or Logos)

Wayne Barber explains the peace with God we now possess...

That means that I have it today. I will have it tomorrow. I will have it the next day. I will always have it. Present tense means continuous duration of action. Indicative mood means that is a fact, take it to the bank. Active voice means the subject is acted upon or doing the acting. We have peace with God. I don’t know about you, but that completely blows my mind because there are a lot of people today who try to tell me I can lose my salvation. But the Word of God says when I put my faith into Jesus Christ, I eternally have peace with God. What does it mean to put my faith into Jesus Christ to get this peace with God? I have to realize my guilt before God. I have to realize I cannot do one single thing to justify myself. I have to realize what Christ came to do for me. Then when I put my faith into Him, when I surrender to Him, I have peace with God.  (see notes Romans 5:1-2 Detail of God's Good News)

Peace (1515) (eirene click here more detail on eirene) is derived from the verb eiro which means “to bind together that which has been separated.” (Related resource: Jehovah Shalom - 1: The LORD our Peace;  Jehovah Shalom - 2)

Harry Ironside summarizes the justified man or woman's peace...

Peace, as used in Romans 5:1, is not a state of mind or heart. It is a prevailing condition between two who were once alienated. Sin had disturbed the relations of Creator and creature. A breach had occured that man could not mend. But peace has been made by the blood of Christ's cross. There is no longer a barrier. Peace with God is now the abiding state into which every believer enters. The sin question is settled. (Ironside, Harry. Romans and Galatians. Kregel. 2006)

Newell writes that...

Peace means that the war is done. Peace with God means that God has nothing against us. This involves:

1. That God has fully Judged sin, upon Christ, our Substitute.

2. That God was so wholly satisfied with Christ's sacrifice, that He will eternally remain so: never taking up the judgment of our sin again.

3. That God is therefore at rest about us forever, however poor our understanding of truth, however weak our walk. God is looking at the blood of Christ, and not at our sins. All claims against us were met when Christ made peace by the blood of His cross (see note Colossians 1:20). So we have peace with God...

If Thou hast my discharge procured,
And freely in my place endured
The whole of wrath Divine:
Payment God will not twice demand,
First at my bleeding Surety's hand,
And then again at mine!

Our peace with God is not as between two nations before at war, but as between a king and rebellious and guilty subjects. While our hearts are at last at rest, it is because God, against whom we sinned, has been fully satisfied at the cross. Peace with God through our Lord Jesus Christ does not mean peace trough what He is now doing, but through what He did do on the Cross. He made peace by the blood of His cross. All the majesty of God's holy and righteous throne was satisfied when Christ said, It is finished. (John 19:30) And, being now raised from the dead, He is our peace. (see note Ephesians 2:14) But it is His past work at Calvary, not His present work of intercession, that all is based upon; and that gives us a sense of the peace which He made through His blood.

This peace with (or towards) God must not be confused with the "peace of God" of Philippians 4:7 (note), which is a subjective state; whereas peace with God is an objective fact-outside of ourselves. Thousands strive for inward peace, never once resting where God is resting-in the finished work of Christ on Calvary.

The difference may be brought out by asking ourselves two questions: First. Have I peace with God? Yes; because Christ died for me. Second, Have I the peace of God in quietness from the anxieties and worries of life in my heart? We see at once that being at peace with God must depend on what was done for us by Christ on the cross. It is not a matter of experience, but of revelation. On the contrary, the peace of God "sets a garrison around our hearts and thoughts in Christ Jesus, " when we refuse to