The closest point method for solving partial differential equations (PDEs) posed on surfaces was recently introduced by Ruuth and Merriman [J. Comput. Phys., 227 (2008), pp. 1943- 1961] and successfully applied to a variety of surface PDEs. In this paper we study the theoretical foundations of this method. The main idea is that surface differentials of a surface function can be replaced with Cartesian differentials of its closest point extension, i.e., its composition with a closest point function. We introduce a general class of these closest point functions (a subset of differentiable retractions), show that these are exactly the functions necessary to satisfy the above idea, and give a geometric characterization of this class. Finally, we construct some closest point functions and demonstrate their effectiveness numerically on surface PDEs. © 2012 Society for Industrial and Applied Mathematics.