Mao Zedong, after the failure of the Great Leap Forward, was viewed as a pariah and the rest of the communist government sought to oust him from power. In 1966, Mao instituted the Cultural Revolution. The stated purpose of the revolution was to purge any remaining capitalist or traditionalist thought from the citizenry, and in its place, establish the Cult of Mao, as the centre of Chinese thought, and life. Mao established his "cult of personality"; that is, Mao himself became the central idea of life in China. Mao had millions of copies of his "Little Red Book" distributed, and persons found without it on their person were subject to punishment. It was during August of 1966 that Mao finally initiated the revolution, calling on the newly formed Red Guard to challenge the established Chinese politicians. He said that the youth of the day needed to step up to confront China's leaders for forwarding the bourgeoise agenda over the people. Mao also claimed that the leaders lacked the zeal and strength to enact the real changes that would benefit the people.

During the revolution, citizens were encouraged to report any "non-Maoist" thought or activity to the Red Guards, who would take appropriate action against the violator. Those who reported violations were often given rewards and positions of authority. This means that from 1966-1976 (at the end of the revolution) much of the productive activity in China came to a halt as people were too afraid to do anything creative or thoughtful. The Cultural Revolution came to an end in 1976, when Mao died after a series of heart-attacks.

The Cultural Revolution was characterized by violence and chaos. Beginning with the Red August of Beijing, massacres took place nationwide, including the Guangxi Massacre, in which massive cannibalism also occurred; the Inner Mongolia incident; the Guangdong Massacre; the Yunnan Massacres; and the Hunan Massacres. Red Guards destroyed historical relics and artifacts, as well as ransacking cultural and religious sites. The 1975 Banqiao Dam Failure, one of the world's greatest technological catastrophes, also occurred during the Cultural Revolution. Meanwhile, tens of millions of people were persecuted: senior officials, most notably Chinese president Liu Shaoqi, along with Deng Xiaoping, Peng Dehuai, and He Long, were purged or exiled; millions were accused of being members of the Five Black Categories, suffering public humiliation, imprisonment, torture, hard labour, seizure of property, and sometimes execution or harassment into suicide; intellectuals were considered the "Stinking Old Ninth" and were widely persecuted. Schools and universities were closed with the college entrance exams cancelled. " Sending-down" saw over 10 million urban intellectual youths were sent to the countryside in the Down to the Countryside Movement.