The evolution of the theoretical discourse of “national literature” in the 20th century has gone through three stages of development: initial stage, mature stage and alienation stage. Mao Dun’s “National Literature Theory” is a sign that the concept of “National Literature” has become clear and mature. Mao Dun’s “National Literature Theory” advocates that national literature should be a kind of “human literature-real literature” concerned with real life and facing the public. It not only truly reflects the life situation and national character of the whole society and the whole nation in China, but also reflects and communicates the common feelings and life of human beings. It reflects the positive and negative aspects of Chinese national character. It embraces the current reality of the nation and the state, presents the characteristics of autonomy, and at the same time reflects the interactive orientation: absorbing the nutrition of traditional literature and foreign literature, and growing up in the interactive dialogue in the literary fields at all times both in China and other countries. From a comparative perspective, Mao Dun’s whole “National Literature Theory” shows clear, open and dialectical thinking characteristics. Mao Dun’s theoretical exploration in the field of nationalization of literature and art is an achievement that cannot be ignored in the history of theoretical construction of literature with Chinese characteristics.