Abstract Internet literature gains tremendous popularity in China with the coming of the digital era. In response to the emergence of the large body of Internet literature, this article examines the Internet literary tendencies observable in China by systematically analysing four issues concerning Internet literature. Based on retrospecting of the history of Chinese Internet Literature (CIL), the study first describes the uniqueness of CIL during its evolution. Then, this study categorizes CIL from three perspectives, namely, the author groups, the genre of the text, and the fiction narrative style. In the third part, this study explores the positive impact of CIL in terms of its interactivity, how it changes the creators’ mode of thinking, how it expands literary genres, the convergence and fusion of print literary genres in CIL, and the shifts in dissemination. The negative impact of Chinese internet literature is also discussed including how vulgar and shallow works impact the depth of print literature, how figurative language limit the readers’ imagination, and how CIL challenges the traditional publishing market. In the end, the far-reaching changes and possible future trends of CIL are discussed.