Studies on Chinese nationalism in Western academia have been influenced by a popular theory called ‘the culturalism-to-nationalism thesis’, a loosely formulated interpretive paradigm which emerged in late 1960s. The literature on this topic, however, reveals an inadequate understanding of traditional Chinese thinking and its influence on Chinese thought in modern history. An examination of the work of Li Dazhao (1889–1927) and his philosophical heritage not only will open up a valuable source for us to rethink about this thesis and its defects, but also will shed light on the complicated background and perspective that give rise to modern Chinese nationalism. Given the interest in Chinese nationalism in contemporary world, an understanding of its historical roots is particularly timely, since in order to understand China’s current and future actions one must understand the origins of Chinese nationalist thinking and its transformations in time. This paper makes a contribution to that historical understanding. I argue that traditional Chinese philosophy, especially the Daoist world view and Confucian ethics played a significant role in shaping Li’s patriotic and nationalist stance. It also predisposed him intellectually to accept the internationalist characteristic of Marxism.