Institutional systems have a crucial impact on the development of biotechnology. In this article, we analyze the interaction between biotechnology and institutions. To conduct our analysis, we use the case study method and the stakeholder perspective. Our findings suggest the following: (1) Through the analysis of patent data, biotechnology has been developing very rapidly in recent years in China; (2) basic biotechnology institutions have been established, consisting of government, policy, and other institutional arrangements; (3) the interaction between the development of biotechnology and its existing institutions is dynamic; and (4) the interaction is affected by relative stakeholders. This study contributes to the theory concerning the governance of biotechnology, which is important in the sustainable development of biotechnology. Moreover, the article sheds light on policy implications.