The localization of Western translation theory has been a significant driving force in the development of translation studies in China. As an innovative translation theory originating in the West, polysystem theory has exemplified how Western translation theory has been appropriated, adapted, and developed in China over the past two decades. In its early stage, the theory gained wide circulation because it responded to the urgent need for Chinese translation studies to move beyond the constraints of linguistics and pursue theoretical innovation. In the new era, the research and application of polysystem theory have contributed to the “rewriting of translation history”, given rise to the concept of “translator’s cultural attitude” and deepened scholarly understanding of fundamental issues such as translator subjectivity. In recent years, the theory has also fostered new directions for localized development through its contributions to the exploration of the nature of translation and the expansion of its theoretical framework and applications. Overall, the dissemination and localization of polysystem theory in China offer a valuable perspective on the localization of Western translation theories and serves as a benchmark for future research, providing valuable insights into intellectual exchange and mutual learning between Chinese and Western translation studies.