During the Hazan’s repetition of the Amida, we recite the Kedusha service ("Nakdishach Ve’na’arisach"). The Zohar (the principal text of Kabbalah) comments on the verse in Parashat Emor, "Ve’nikdashti Be’toch Beneh Yisrael" ("I shall be sanctified amidst the Israelites" – Vayikra 22:32) that one fulfills this Misva through the recitation of Kedusha. When we declare God’s sanctity in Kedusha, we fulfill the Torah obligation of sanctifying the Divine Name.
Accordingly, the Ben Ish Hai (Rabbi Yosef Haim of Baghdad, 1833-1909), in Parashat Teruma, writes that some have the custom to think in their minds just before Kedusha that they seek to fulfill the Torah obligation of "Ve’nikdashti." Hacham Ovadia Yosef, in his Halichot Olam, cites other sources indicating that one does not, in fact, fulfill a Torah obligation through the recitation of Kedusha. He asserts that when the Zohar made this comment, it meant that this verse in Parashat Emor serves, at most, as an "Asmachta" – a subtle allusion in the Torah to a law enacted later by the Sages.
In any event, according to the Ben Ish Hai, it is proper to have this obligation in mind before one begins reciting Kedusha.
The Ben Ish Hai then proceeds to record the well-known custom to elevate oneself by lifting his heels each time he recites "Kadosh" in the verse in Kedusha, "Kadosh, Kadosh, Kadosh Hashem Seva-ot…" According to many authorities, including the Shela Ha’kadosh (Rabbi Yeshaya Horowitz, 1565-1630), the Ben Ish Hai and Hacham Ovadia Yosef, one should lift his heels also as he begins reciting the other two verses of Kedusha – "Baruch Shem Kebod" and "Yimloch." The Kaf Ha’haim (Rabbi Yaakob Haim Sofer, Baghdad-Israel, 1870-1939) held that according to Kabbalah one should not elevate himself while reciting these two verses. As mentioned, however, other authorities disagree, and the common practice is indeed to lift one’s heels for all three verses, and not only for "Kadosh, Kadosh, Kadosh."
It is improper to jump or dance while lifting oneself during the Kedusha. The Yam Shel Shelomo (Rabbi Shlomo Luria of Lublin, 1510-1573) writes that he observed people jumping and dancing during Kedusha, and he calls this practice a "Minhag Burim" ("the custom of fools").
There is a debate among the authorities as to how precisely the lifting should be done during the recitation of "Kadosh, Kadosh, Kadosh." The Ben Ish Hai applies here the principle of "Ma’alin Ba’kodesh Ve’en Moridin" – "We ascend in holiness, and do not descend." Accordingly, he maintains that one should lift his heels slightly while reciting the first "Kadosh," a little higher for the second "Kadosh," and higher still for the third and final "Kadosh." The Kaf Ha’haim disagrees, arguing that one should lift himself to the same height during all three recitations of "Kadosh." He notes that if anything, the first "Kadosh" is more significant than the other two, and therefore should certainly not be treated more lightly. Hacham Ovadia similarly maintains that one should lift his heels to the same height for all three recitations of "Kadosh."
Summary: It is proper before reciting Kedusha to have in mind that one seeks to fulfill through this recitation the Misva of "Ve’nikdashti Be’toch Beneh Yisrael" ("I shall be sanctified amidst the Israelites" – Vayikra 22:32). One should elevate himself by lifting his heels each time he recites the word "Kadosh," and as he begins "Baruch Shem" and "Yimloch." While reciting "Kadosh, Kadosh, Kadosh," one should lift his heels to the same height for each recitation of "Kadosh."
