Most observers hold a positive view of China's reform since 1978 but are critical of the policies of the era of Mao Zedong, ignoring the inseparable connections between the two. This article argues that the post-Mao era reform represents both continuity and discontinuity with the immediate past, and a complex mingling of Mao's legacy with new initiatives. The origins of many reform policies, as well as their accomplishments, could be traced back to the Mao era. They were often conditioned by, benefited from, or were built upon the outcomes of Mao's policies. These included the decisions to normalize China's relations with the United States and develop friendship with Third World countries, efforts to decentralize economic power and industrialize China without urbanization, and the move to defeat "capitalist roaders" but call Deng Xiaoping back to office. Overall, the turn toward capitalism of China has proven Mao's foresight, validated his concerns, and may be evidence of the lasting utility of Maoism. © 2011 Policy Studies Organization.