This paper focuses on Lao She’s The City of Cat of 1933, the interpretation and criticism of which are now dominated by two discourses with two relative, yet different views of utopian satire and anti-utopian fiction. I first examine both the external and internal contexts of the novel. They are significant in the recognition of The City of Cat as utopian satire. In other words, illuminating viewpoint notwithstanding, this novel is in fact different from anti-utopian fiction in its political intention, satiric target, and narrative tone. Then I examine the previous studies on utopian fiction of both the Western and Chinese literary traditions to determine the way in which the author, Lao-she, and his The City of Cat were influenced. I argue that, while many believe contemporary writers were eager to learn literary thoughts and techniques of the Western tradition, the Chinese literary tradition still had strong influence on Lao She, a writer of the May Fourth period.