With the development of the commodity economy, towns became a new form in China’s urban landscape during the Ming and Qing dynasties. Of those towns, Jingdezhen, Zhuxianzhen, Foshan and Hankou, which were titled “The Four Famous Towns” in China, entered into a phase of thriving economic development. Their economies mostly could be considered as the resourceexploitation type, the comprehensive development type, and the commoditydistribution type. There were in fact several common factors found in these four towns. However, as Chinese history moved into its modern phase, foreign inputs, new social forces, and changing political systems all posed serious challenges to traditional towns. Modern development in the four towns took divergent paths. The town of Hankou developed rapidly, but the other three towns declined. From the different fates of these towns, important factors of urban modernization can be pried out.