This study examines the development and social significance of Wudang martial arts in contemporary China. While modern forms emphasize their competitive aspect, traditional Wudang martial arts have been valued not only as combat techniques but also as methods of spiritual cultivation and health enhancement, rooted in Taoist teachings. This study examines the transformation of Wudang martial arts following China’s economic reform and opening-up policy initiated in the 1980s, incorporating the personal accounts of private practitioners. The findings reveal that traditional Wudang martial arts primarily centered on “nurturing life” (yangsheng or regimen), emphasizing the Taoist theory of Qi rather than martial prowess. Despite the competitive and tourism-driven transformation promoted by national policies, private practitioners oppose the reconstitution and commercialization of Wudang martial arts, stressing the importance of preserving traditional spiritual practices. As a result, this study highlights the divide between the state and the civil society, showing how Wudang martial arts serve as a mediating space between the two. The struggle for control over the practice reflects broader dynamics in the preservation and development of traditional Chinese culture.