The two most important rites in Protestant churches are the two sacraments: baptism and the Lord's Supper. Many of the most contentious theological issues in Protestantism have centered on or been related to the understanding of these sacraments (or ordinances), which have divided not only Protestants from Roman Catholics, but Protestantism into its incredible variety.
A sacrament is an action in and through which God's grace is conveyed to people. Roman Catholics have seven sacraments: baptism, confirmation, confession, Lord's Supper (Eucharist), marriage, ordination, and extreme unction (or anointing of the sick, formerly referred to as last rites). Luther cut this list down to the two sacraments of baptism and the Lord's Supper. He believed that, to be a sacrament, a ritual had to be explicitly instituted for the Church by Jesus in the Gospels. Jesus tells his disciples to go and baptize in the name of the Father, the Son, and the Holy Spirit (Mt. 28:19), and at the Last Supper as he breaks bread he tells them to "do this in remembrance of me" (Lk. 22:19). Other rituals, while important, do not meet this criterion. They are rites but not sacraments. Rites that are for specific occasions such as marriage or ordination take place during "occasional services." All Protestant churches followed Luther's lead on this.
Reformed, Lutheran, Anglican, and Methodist Christians continued the practice of infant baptism, though they disagreed with the Catholics that baptism was strictly necessary for salvation (thus they discouraged emergency baptisms of sick infants). For Luther, infant baptism was a sign that salvation was purely a gift from God, not an act of human understanding. Calvin in addition argued that there was only one covenant between God and humans, the sign of which for the Israelites was circumcision, and now for Christians is baptism. Baptism was the precise functional equivalent of circumcision among the Jews, and so Christians ought to baptize at about eight days of age, as the Jews did.
Anabaptists and Baptists argued that, if salvation was by faith alone, a rite symbolizing the forgiveness of sins was meaningless if performed for someone too young to understand the predicament of sin and the promise of forgiveness. They therefore baptize only those who can responsibly acknowledge sin and ask for forgiveness (typically about 13 years of age at minimum). Lutherans and Reformed theologians argued that, to require human understanding was precisely to make salvation dependent on a human capacity or act, which contradicted the meaning of the forgiveness being presented and symbolized.
The meaning of the Lord's Supper was the issue that initially kept Protestants from forming one Church. Luther believed that the body and blood of Jesus were physically present with the elements (the bread and the wine). Though it was impossible for humans to fully comprehend this, Jesus did not lie when he said, "This is my body," as he held up the bread. Jesus was "in, with, and under" the elements. Zwingli said that the Lord's Supper was only a symbol and this, for Luther, called into question the reliability of the promises found in scripture. If that was lost, everything was lost.
Zwingli believed that when Jesus held up the bread and said, "This is my body," he was using a figure of speech. For Zwingli, those gathered at the table were present because they were already members of the body of Christ (through baptism). Celebrating the Lord's Supper is a commemoration of a past event (Christ's saving sacrifice on the cross), and a public declaration of membership in the community founded by Jesus. If one can speak of a divine presence, it is the presence of the Spirit that forms the Christian community. There was a sharp distinction for Zwingli between the sign and the thing signified. The sacrament does not impart grace—that is done directly by the Holy Spirit. It is an indication by believers that they have already received grace.
Calvin attempted to walk a middle path between these two positions, though he was closer to Luther than to Zwingli. Calvin agreed with Luther that the Lord's Supper was actually efficacious; it did not merely symbolize something that has already happened, it caused something to happen. He asked, "Why would the Lord put the symbol of his body in your hands unless to assure you of true participation in it?" But Calvin could not read the passage "This is my body" in the same way Luther did. At stake for Calvin was the location of Christ and the way Christ is present after Jesus' crucifixion and resurrection. If Jesus' physical, resurrected body "sits on the right hand of God the Father almighty," then it cannot, according to Calvin, be with the bread. Jesus was bodily present on earth for his thirty-odd years in the flesh, but now Jesus is in heaven. Calvin accused Luther of wanting to yank Jesus' body down from heaven and parcel it out bit by bit. For Calvin there was a real presence of Jesus in the elements, but it was a spiritual presence.