Objectives To manage the development of the maternal and child healthcare institution (MCHI) in China, it is important to understand the key challenges and the influencing factors for sustainable development of MCHIs. However, these areas have not been fully investigated previously. This qualitative study aims to systematically explore the perceived development challenges for MCHIs from the perspectives of MCHI staff and government officials. Design Qualitative approaches, including focus group, semistructured interview and documentary analysis, were employed to identify development challenges encountered by the MCHIs in Chengdu city, China. Participants Totally 16 medical staff of MCHIs and officials from local government. Measures Participants' opinions about the development challenges for MCHI. Results The study revealed the main development challenges for MCHIs included: (1) incapability to provide differentiated medical service (including differentiated maternal and child health maintenance, integrative model of health maintenance and disease treatment, lack of innovation capability); (2) insufficient financial support; (3) shortage of gynaecologists and paediatricians; (4) insufficient facilities and medical equipment; (5) weakness in adopting information technology and (6) constraints of law and regulations. Conclusions The study recommends that MCHI should take governance reform to promote healthcare innovation to ensure the sustainable development of MCHI. Public-private partnership needs to be considered for the sustainable development of MCHIs.