The Clean Development Mechanism under the Kyoto Protocol was implemented in China several years ago. In spite of the significant benefits the CDM has brought to China, legal research on the CDM is relatively weak and there are many legal problems with the implementation of CDM projects in Chian. This article clarifies the legal problems of implementing the CDM in China by exploring and analyzing how to implement CDM projects, the legal relationships involved, CDM-related contracts and various key legal issues. The conclusions drawn from the above discussions could have implications for the future carbon reduction activities in China beyond 2012.