The modern Chinese literary tradition that emerged along with the May Fourth Movement has already spilt over into every aspect of contemporary Chinese life. As shaping force in Chinese literary and cultural evolution, this “New Tradition” calls for renewed critical scrutiny. In the face of new contemporary challenges that threaten to subvert the May Fourth literary tradition, the value of this tradition calls for grave reconsideration. This paper, as part of a research on the formation of the New Tradition, views this literary tradition as “a chain of interpretative variations” which has undergone the incessant interpretative selections, siftings, and moldings of historians as well as literary critics of various historical phases, and which nevertheless cannot go beyond the limits of their times. This paper examines how literary historians and critics from the 1920s to the 1940s evaluated the New Literature, how they constructed their perspectives on literary history on the basis of their evaluation, how their theories and ideas have come through the decades to bear upon people’s conceptualization and evaluation of the New Literature. The paper aims to map the trajectory of the cognizance of modern Chinese literature as well as some of the significant stages in the early days of the New Tradition.