The Chinese government launched policies supporting biodiesel production and innovation to meet sustainable energy demands under rapid economic and social development. This study systematically investigates the dynamic transitions of biodiesel policies in China regarding policy contents and policy networks. We performed a content analysis in this study and used NVivo12 software to support the analysis process. The results highlighted some issues. First, the Chinese government supported the development of biodiesel from multiple policy objectives and adopted various policy instruments, eventually transforming biodiesel in China from the first- to second-generation. Second, the State Council was the main institution to promote biodiesel policies, and the National Development and Reform Commission under the State Council burdened most of the responsibilities of policy implementation. Most of the policies were issued at a lower level of administration rather than a higher level of decision-making. Biodiesel policies in China were gradually detailed, and they constantly established a system of technology and product innovation.