In contrast with naturalistic evolution, guided evolution (also called theistic evolution) is another way to understand the evolution of life on earth. Guided evolution is the idea that God ordained and sustained the gradual evolution of life. Guided evolution is also called evolutionary creation in that evolution is seen as God's method of creation. This approach is a reasonable and well-supported balance between faith and science.
Guided/theistic evolution and evolutionary creation holds that traditional religious beliefs about God are compatible with the modern scientific understanding about biological evolution. In short, theistic evolutionists believe that there is a God, that God is the creator of the material universe and (by consequence) all life within it, and that biological evolution is simply a natural process within that creation. Evolution is simply a tool that God employed to develop the vast diversity of life that we see on earth today.
The idea of guided evolution seems to be supported by Genesis 1:24, which says, "Let the earth bring forth all kinds of living creatures." Genesis doesn't say that God directly created plants and animals in their final form, only that they came forth from "the earth."
Furthermore, the Catechism of the Catholic Church implicitly supports guided evolution when it states, "Creation … did not spring forth complete from the hands of the Creator. The universe was created 'in a state of journeying' toward an ultimate perfection yet to be attained, to which God has destined it. We call 'divine providence' the dispositions by which God guides his creation toward this perfection." (#302)
In order to understand more clearly how God guides his creation, including the evolution of life on earth, we need to understand the difference between "primary causes" and "secondary causes", as well as between "intelligent causes" and "natural causes." A primary cause is the first cause, but not a sole cause of something else. A secondary cause is a dependent cause. An intelligent cause is due to the action of an intelligent agent (human or divine). A natural cause is a random event (due to chance) or a result of a governing law(s) of nature (necessity).
Think of it this way: When Michelangelo carved the statue of David, was it he or his chisel that did the carving? The answer is both. Clearly, Michelangelo was the primary intelligent cause behind the design and creation of the statue. His chisel was a secondary natural cause. It was a natural cause since the laws of nature govern what actions are needed to affect a certain shape in marble with a particular chisel.
Similarly, God is the primary and intelligent cause of the universe and all within it. But, in the ongoing evolution of the universe and of life, God prefers to work through secondary natural causes (e.g., actions guided by the laws of nature that He created). Evolution is merely God's tool (his "chisel" so to speak). In this sense, evolution does not replace or negate God's activity in the origin and development of life on earth. Rather, evolution is God's method of creation.
This concept was articulated in a 2004 statement by the Church's International Theological Commission (ITC), while Cardinal Ratzinger (who later became Pope Benedict XVI) was its president. The ITC stated, "God wills to activate and to sustain in act all those secondary causes whose activity contributes to the unfolding of the natural order which he intends to produce. Through the activity of natural causes, God causes to arise those conditions required for the emergence and support of living organisms... Thus, even the outcome of a truly contingent natural process can nonetheless fall within God's providential plan for creation." In short, secondary and natural causes are also an expression of God's creative activity.
Even Charles Darwin, at the end of his book On the Origin of Species, acknowledged as much when he wrote, "To my mind it accords better with what we know of the laws impressed on matter by the Creator, that the production and extinction of the past and present inhabitants of the world should have been due to secondary causes."
Therefore, the core distinction between guided/theistic evolution and naturalistic/materialistic evolution is the conviction as to whether or not God has been behind the evolutionary process. Surprisingly, there is even scientific evidence in support of guided/theistic evolution since an intelligent cause is the best explanation for certain features of life on earth.