A. W. Pink does well in defining this difficult term for us:
To sanctify, then, means in the great majority of instances, to appoint, dedicate or set apart unto God, for a holy and special use. Yet that act of separation is not a bare change of situation, so to speak, but is preceded or accompanied by a work which (ceremonially or experimentally) fits the person for God. Thus the priests in their sanctification (Lev. 8) were sanctified by washing in water (type of regeneration: Titus 3:5), having the blood applied to their persons (type of justification: Rom. 5:9), and being anointed with oil (type of receiving the Holy Spirit: 1 John 2:20, 27). As the term is applied to Christians it is used to designate three things, or three parts of one whole: first, the process of setting them apart unto God or constituting them holy: Hebrews 13:12; 2 Thessalonians 2:13. Second, the state or condition of holy separation into which they are brought: 1 Corinthians 1:2; Ephesians 4:24. Third, the personal sanctity or holy living which proceeds from the state: Luke 1:75; 1 Peter 1:15. - A.W. Pink, The Doctrine of Sanctification.