The aim of Critical Discourse Analysis (CDA) is to reveal how ideologies influence the discourse, and vice versa by studying the linguistic characteristics of the discourse and the specific social, economic, political and historical contexts the discourse itself is based on. As a type of mass media discourse, news plays a more and more important role in the society. It not only conveys the information to the readers, but also influences the attitudes and concepts of the readers by the embedded ideologies. Thus, news discourses evoke much interest of critical linguistics. The present study selects the news reports on the 2010 Diaoyu Islands incident from three newspapers: China Daily, The Japan Times and The New York Times. Based on Fairclough’s three-dimensional model and Systematic Functional Grammar, the present thesis conducts a contrastive critical analysis of news reports in three stages. In response to the research questions, this study has obtained the following findings: The different linguistic features are shown in the three newspapers towards the report on the same event. In the lexical choices, the three newspapers report differently from three perspectives, i.e., the description of the incident location, the description of the cause of the incident and the naming of the incident. In the distribution of the processes, verbal process takes the highest percentage both in China Daily and The Japan Times, while material process takes the highest percentage in The New York Times. In the distribution of the news sources, the quotation from its own authorities takes the highest percentage both in China Daily and The Japan Times, while the quotation from all walks of Japan takes the highest percentage in The New York Times. Besides that, news sources from Chinese experts and scholars in China Daily take a high proportion; and a large number of news sources from American authorities are detected in The Japan Times. Different linguistic features reflect different ideologies embedded in the three newspapers. And the main reason for that is the difference of politics, history and culture existing in the three countries. Accordingly, news discourse, especially political news discourse could not only reflect the dominant ideology, but also serve to convey the ideology to influence or even change the reader’s understanding of the events reported in the newspapers.