In the 1980s and 1990s, China devoted extensive resources to constructing a legal system, in part in the belief that legal institutions would enhance both stability and regime legitimacy. Why, then, did China's leadership retreat from using law when faced with perceived increases in protests, citizen complaints, and social discontent in the 2000s? This law-stability paradox suggests that party-state leaders do not trust legal institutions to play primary roles in addressing many of the most complex issues resulting from China's rapid social transformation. This signifies a retreat not only from legal reform, but also from the rule-based model of authoritarian governance that has contributed much to the resilience of the Chinese system. The law-stability paradox also highlights the difficulties facing efforts by China's new leadership to reinvigorate legal reform.