This study explores the principles of meritocracy and heredity as formulated in the three works of early Daoist philosophy, the Laozi, Zhuangzi and Wenzi. Because Daoist philosophy emerged in critical response to the Confucian worldview, this investigation is placed against the backdrop of pertinent Confucian propositions. To this end, the study begins with a review of Confucian positions on the issue of meritocracy and heredity as expressed in the main transmitted works, as well as newly excavated texts that can be associated with this intellectual tradition. The paper concludes that, while indeed rejecting the Confucian understanding of meritocracy, Daoist texts operated with their own concepts on human excellency. Moreover, the opposition between meritocracy and heredity characteristic of some Confucian works appears less pronounced in early Daoist philosophy.