Modern Chinese university spirit is connected with traditional Chinese educational philosophy, especially the Confucian idea of Great Learning. Cai Yuanpei, the first President of Peking University, was a pioneer in advocating the modern university spirit and putting it into practice. The core of the university spirit Cai advocated is the principle of freedom of thoughts and an all-embracing attitude based on a synthesis of Chinese and Western cultures. During his tenure as the President of Peking University, Cai’s devotion to independent thinking, his innovative experimentation with school administration and encouragement of young talent helped to develop Beijing University into one of the major institutions of higher education in China. Cai’s vision of university spirit still has much relevance to contemporary China, including the following valuable ideas: that the university president is indispensible for the formulation of a university’s spirit, and the spirit of a university should be conducive to the cultivation of talent and freedom of thought in an atmosphere of tolerance, creativity and innovation.