This paper investigated project-based governance (PBG) in China's higher vocational education (HVE) with a main research question asking how PBG works in China's HVE. Using case study as a research strategy, the paper examines the application and effect of the PBG model on Chinese HVE within the analytical framework of PBG-based agency theory. Twenty-three faculty members from both administrative and academic departments in College Plateau (pseudonym) were recruited to participate in a person-to-person interviews. They were expected to share their observations and perspectives on the PBG model as applied to HVE. As supplementary materials, the Chinese government's policy documents and statistics, as well as institutional policy documents, were also looked at for a brief discussion of governance of China's HVE. The results showed that the PBG model has greatly challenged the traditional administrative, distribution and personnel systems, as well as the college-enterprise cooperation model, and academic performance of higher vocational colleges (HVCs). These changes have brought higher academic achievements and greater social resources to College Plateau. However, they have also caused many negative effects, such as homogeneity of organizations and the Matthew effect among HVCs.