This paper discusses the historical route of formation of Chinese Buddhist schools with a special view of translation and transmission of Buddhist scriptures coming from the Western Region. As a whole, the direct source of the Chinese Buddhism in the real sense can be traced back to the two great figures establishing the theoretical ground for Chinese Buddhist sectarianism. They were Master Dao-an and Buddhist missionary Kumarajiva. Their translating and exegetical activities in propagation of Buddhist scriptures threw a farreaching influence upon the academic study of philosophical and theological dcotrines in Chinese Buddhism. Each of the Chinese Buddhist schools theoretically based itself upon one or a few Buddhist scriptures that originally came from India, but actually none of them understood the texts word by word as in the homeland of Buddhism. The way the Chinese Buddhist schools dealt with the sutra was different from Indian monks. Master Dao-an is the pioneer of the typical methods of interpreting Buddhist scriptures and Kumarajiva carried forward the exegetical way. Before the two figures, there was no one expounded Buddhism with Chinese terminology to such a deep degree in the Chinese Buddhist community. Thus, only at Kumarajiva's times, there appeared an independent academic Buddhist ideology in China. It is Master Dao-an and Kumarajiva that bestowed Chinese Buddhism with its distinctive exegetical format which primarily expressed itself in the systematic studies of Buddhist texts in the Northern and Southern Dynasties (C. 300 ∼ 589 CE). During the period, there emerged a member of Buddhist academic schools in the North and South China. Owing to their common expounding activities, Chinese Buddhism become further more matured and finally reached its zenith. During the historical process of the 300 years, Chinese Buddhism gradually got rid of the previous tendency of seeing Buddha's teachings with the Indian eyes. It learned to place its understanding upon a new ground in order to construct a set of self-satisfying religious and philosophical notions and institution within a totally different cultural atmosphere. At the end of the Northern and Southern Dynasties, with the reunification of the northern and southern parts of China, Buddhism came to permeate Chinese society at all levels and its clergy had become a distinct group with unique spiritual and cultural influence. In the coming Sui and Tang Dynasties, Chinese Buddhist schools would eventually set up their own dharma lineages and academic traditions which economically based upon a certain number of big monasteries and institutionally upon distinctive Buddhist communities.