Mao Dun had painstakingly researched into Chinese myths and hence gains popular acknowledge from the academic circle that considers him one of the key founders of Chinese mythology. Mao Dun's writings about fairy tales often reveal the nationalism, and this study will discuss this point in the following lines. He used western literatures for reference to create a neo-Chinese literature in order to apply his appeal to his study of mythology. He first analyzed Chinese mythology in a rational, scientific aspect of anthropology by excluding feudal, superstitious Tao fairy stories. He also emphasized the equality of Chinese myths with western ones by comparing the two. He even created the system of Chinese mythology by compiling up scattered related literatures. These demonstrate Mao Dun's nationalism, and it is this very complex that reflects intellectuals' fervent patriotism in early years of the Republic of China