At present, inversions at higher temporal and spatial resolution tend to be in increasing demand. The resolution and precision of methane (CH4) inversions depend on quality of observations, transport model, and inversion scheme. Currently, most inversion-based estimates of CH4 in China use a global atmospheric transport model to relate emissions to observations, or a Lagrangian model to quantify the receptor-to-source sensitivity. Taking advantage of the ability that regional transport models have in mesoscale simulation, a regional inversion system was developed to infer China’s CH4 emissions. The CMAQ (Community Multi-scale Air Quality) model was configured for forward simulation of CH4, including processes of emission, transport, diffusion, and chemical transformation. Furthermore, the Ensemble Kalman Smoother was extended to assimilate satellite observations with joint optimization scheme of concentrations and emissions to reduce the impact of initial uncertainty. We found that the posterior annual estimated emissions (53.30 Tg a−1) in 2020 were closer to the official reported figure (53.57 Tg a−1) than to the prior (63.80 Tg a−1), with a downward correction of 16.45% in prior estimates based on extrapolation of the bottom-up inventory, which likely led to overestimation. Moreover, under current observational coverage, monthly posterior estimates reflected region-dependent responses to local conditions. Generally, the regional assimilation system estimated annual and monthly CH4 emissions well, attributable to reliable CMAQ simulation, joint assimilation scheme, and careful selection of satellite retrievals. In addition, evaluation of the posterior estimates indicates that inversion delivers reasonable improvements, but amelioration of uncertainties in prior information and observations is still needed.