Purgatory refers to a doctrine in the Roman Catholic Church which posits that those who die in a state of grace undergo a purification in order to achieve the holiness necessary to enter heaven (Catechism of the Catholic Church 1030).
The Orthodox Church has neither explicitly recognized the term "purgatory" nor officially accepted such a state, which is distinct from the more general being "asleep in the Lord." In his book entitled Why Do We Reject Purgatory?, Coptic Pope Shenouda III presents many theological and biblical arguments against Purgatory. For example, he refers to 1 Thess 4:16,17, "And the dead in Christ will rise first. Then we who are alive and remain will be caught up together with them in the clouds to meet the Lord in the air. And thus we shall always be with the Lord", in which Paul describes the Last Day saying that those faithful who are still alive will meet the Lord with those who rise from the dead and then remain with Him always, and wonders, "Are these faithful (alive on the Last Day) exempt from Purgatory? Or is God showing partiality towards them?"
That said, Greek Orthodox Metropolitan Kallistos Ware acknowledges several schools of thought among the Orthodox on the topic of purification after death. This divergence indicates that the Catholic interpretation of purgatory, more than the concept itself, is what is universally rejected. Also, there are Orthodox sources that indicate some sins can be forgiven after death;(Mt 12:32) but which also reject the notion of purgatory because of the indulgences and idea of purgatorial fire that are tied to it.
Some Eastern Orthodox sources, including the Ecumenical Patriarchate, consider Purgatory to be among "inter-correlated theories, unwitnessed in the Bible or in the Ancient Church" that are not acceptable within Orthodox doctrine, and hold to a "condition of waiting" as a more apt description of the period after death for those not borne directly to heaven. This waiting condition does not imply purification, which they see as being linked to the idea "there is no hope of repentance or betterment after death." Prayers for the dead, then, are simply to comfort those in the waiting place.
Other Orthodox believe in the "toll gate" theory by which the dead go to successive "toll gates" where they meet up with demons who test them to determine whether they have been guilty of various sins during life and/or tempt them to further sin. If they have not repented and been absolved of those sins, or if they give in to sin after death, they will be taken to Hell.
Some Church Fathers, such as st. Cyprian and blessed Augustine of Hippo, seemed to believe in a purification after death. Anyqay, the character of this purification is never clarified, and especially (as st. Mark of Ephesus underlined at the Council of Florence) it seems there's no true distinction between heaven, hell and the so-called purgatory: all souls partake differently in the same mystical fire (which, according to st. Isaac the Syrian, is God's Love)but because of their spiritual change they are bound to different reactions: bliss for those who are in communion with him; purification for those in the process of being deified; and remorse for those who hated God during their earthly lives. Because of this confusion and inability of the human language to understand these concepts and have a certain traditional belief on life after death, the Church refrains from any theological speculation, just reaffirming the unbroken Tradition of prayers for the dead, the certainty of immortality, the inexistence of reincarnation and the communion of the saints, both dead and alive, in the same Body of Christ which is the Church. Private speculation is thus still possible as it was in the time of the Church Fathers.