Hu Shi (1891-1962) applied epistemology in his well-known book History of Chinese Philosophy published in 1919. That has greatly influenced the academic world in its study approaches for the past decades. Therefore, this paper aims at further examining such phenomenon. When applying epistemology to expound the philosophy of Zhuang-zi, Hu Shi could only explain where Zhuang-zi's optimism (also called as extreme conservatism in Hu's book') originated from. As for questions like how epistemology was compatible with the study of Zhuang-zi in their purposes or how the nature or effect of knowledge itself could produce proper definition for Zhuang-zi's philosophy have become hot debated issues thereafter. A great variety of scholarly explanations has formed a particular study path. However, their content needs further discussion. Hence, the purpose of this paper is to further analyze these questions. There are two main conclusions presented: first, Hu's view on the history of names during early Quin ( xian quin ming xue shi) has established the themes and topics that all the scholars today have to deal with. But the various studies of history of xian quin epistemology inspired by Hu mainly center on the aspect of sociology of knowledge. Accordingly, the criteria of knowledge formation and social conditions of knowledge application were discarded by many scholars. This may provide a borderline or sequencing order for positioning the credible knowledge highlighted by Zhuang-zi's writings. Second, as the time proceeds, the application of epistemology has been broadened to the discussion of how knowledge functions in the study of Zhuang-zi. When it comes to the inner texture of the study itself, such a query refers to the proof of the nature of knowledge and the determination of its effect. These two are the essential criteria of defining Zhuang-zi's concept of Xiaoyao. Zhuang-zi's writing aimed at establishing a thinking of somewhere out there different from all other conventions, so such a somewhere out there is to serve as a place for people to reflect on the goodness so that the inherent value of the study of Zhuang-zi can be maintained. Therefore, scholars also have to deal with the challenges from the collective deliberations of the here within. If Zhuang-zi's judgment of goodness could pass the objective criteria of knowledge, then though the out there and the here within don't share much in common, his philosophy will not be disparaged as something grotesque or bizarre out of mere subjectivity and arbitrariness; instead, it may be accepted by those who stand "here within" a social boundary.