The capacity of the Chinese government to provide adequate public services is constrained. Social service organizations have been founded to fill the gap. The Chinese government reformed its policies in 2007 to more effectively use social organizations to meet people’s needs and strengthen its management to avoid social disorder. The decentralized governance system assigned local government units to develop specific policies to fulfill this goal. To provide updated information on social service organizations and their relationship with the government in this new context, this study investigates four disability service organizations with a focus on Beijing. It is found that grassroots service organizations exhibit fairly strong autonomy and viability in the development process. However, these organizations have an ambivalent potential to contribute to the development of civil society in the future. Both facilitating and constraining factors are identified in this study. Moreover, policy changes alter the relationship between the government and social service organizations. This study argues that a state-led partnership has emerged between the state and the grassroots service organizations in China. The future development of this embryonic partnership depends on the degree to which the government relies on grassroots service organizations to meet people’s needs and its regulatory capacity to effectively manage this partnership-building process.