Lay Buddhism is situated at the center of intersecting power relationships between politics and religion, and between sangha and laity. The understanding of its evolution is fundamental to explore the logic of the recomposition of the whole Buddhist landscape in contemporary China. Based on historical materials and fieldwork, this article examines the organizational form, social participation, and political space of lay Buddhism over the past century. In the first half of the 20th century, new intellectual and economic elite Buddhists renewed their mobilization modalities, deeming their participation in the building of the Chinese modern state and society as an accumulation of religious merits. After 1949, under the policy of state corporatism that aims to control and use sangha Buddhism, lay Buddhism was extremely marginalized. This lasted long following the 1980s. In the ongoing Buddhist revival, lay Buddhism has much less political power for development than sangha Buddhism, since the post-Mao communist state consistently tries to limit the religious mobilization outside of official frameworks. However, since the end of the 20th century, many new forms of lay Buddhism have emerged in the PRC under the influence of transnational Buddhist organizations based on overseas Chinese societies. Such diversification and globalization of lay Buddhism has created a challenge for both the authority of sangha and the efficiency of religious policy.