Cunninghamia lanceolata is an essential timber species that provide 20%–30% raw materials for China’s timber industry. Although a few transcriptomes have been published in C. lanceolata, full-length mRNA transcripts and regulatory mechanisms behind the cellulose and lignin biosynthesis have not been thoroughly investigated. Here, PacBio Iso-seq and RNA-seq analyses were adapted to identify the full-length and differentially expressed transcripts along a developmental gradient from apex to base of C. lanceolata shoots. A total of 48,846 high-quality full-length transcripts were obtained, of which 88.0% are completed transcriptome based on benchmarking universal single-copy orthologs (BUSCO) assessment. Along stem developmental gradient, 18,714 differentially expressed genes (DEGs) were detected. Further, 28 and 125 DEGs were identified as enzyme-coding genes of cellulose and lignin biosynthesis, respectively. Moreover, 57 transcription factors (TFs), including MYB and NAC, were identified to be involved in the regulatory network of cellulose and lignin biosynthesis through weighted gene co-expression network analysis (WGCNA). These TFs are composed of a comparable regulatory network of secondary cell wall formation in angiosperms, revealing a similar mechanism may exist in gymnosperms. Further, through qRT-PCR, we also investigated eight specific TFs involved in compression wood formation. Our findings provide a comprehensive and valuable source for molecular genetics breeding of C. lanceolata and will be beneficial for molecular-assisted selection.