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Avalokitesvara Bodhisattva when practicing deeply the Prajna Paramita,

Paraphrase
A wise, compassionate disciple of Buddha was ... dwelling in the transcendent wisdom...

Commentary (underlined words are defined below)

Prajna Paramita is an understanding and analysis of all form-dharma and mind-dharma through contemplations. Form-dharma refers to perceptible objects making up the first of the Five Skandhas, matter. The remaining four Skandhas, namely feeling (sensation), perception (recognition cognition), impulses (volition, mental formation) and consciousness, are all mind-dharmas. Prajna Paramita is a wonderful wisdom attained through cultivation and practicing of meditation and contemplation. Prajna Paramita is one of the Six Paramitas practiced by all Bodhisattva.

 

Dharma
Sanskrit word, has many meanings in Buddhism  (law, truth). Here it mean all things, visible or invisible.
Contemplation
abstract contemplation. There are four levels through which the mind frees itself from all subjects and objective hindrances and reaches a state of absolute indifference and annihilation of thought, perception, and will. See also Meditation.
 
Meditation
the fifth Paramitas. There are numerous methods and subjects of meditation.
 
Skandhas
the aggregates (heaps or groups) that together form one interdependent unit which we perceive as the self. The 5 Skandhas are Form, Feeling, Perception, Impulses (mental volition) and Consciousness.
 
Paramita
Means to cross over from this shore of births and deaths to the other shore which is the Nirvana.
Six Paramitas

The Six Paramitas or means of so doings are
(1) dana - charity/giving
(2) sila - moral/conduct/taking precepts
(3) ksanti - patience
(4) virya - vigor/devotion/energy
(5) dhyana - contemplation/meditation
(6) prajna - wisdom.

The Ten Paramitas are the above plus
(7) upaya - use of expedient or proper means
(8) pranidhana - vow of bodhi and helpfulness
(9) bala - strength
(10) intelligence

The list of ten as the perfect exercise of Each of the ten is divided into ordinary, superior and unlimited perfection, making up to thirty in total.
 
Avalokitesvara
Sanskrit word for the Bodhisattva who Hears the Sounds of the World. He rescues all beings by hearing their voices of suffering and cries for help. One of the Four Great Bodhisattva, he is the one with the greatest compassion and mercy.

Bodhisattva
A Future Buddha who is a being destined to Buddhahood. Bodhi means Enlightenment and Sattva means Sentient and Conscious. Therefore Bodhisattva refers to the sentient being of or for the great wisdom and enlightenment. Bodhisattva's vow/aim is the pursuit of Buddhahood and the salvation of others and of all. He seeks enlightenment to enlighten others. He will sacrifice himself to save the others. He is devoid of egoism and devoted to help the others. The way and discipline of Bodhisattva is to benefit the self and the others, leading to Buddhahood.