Abstract: When western policy diffusion theory becomes dominant and policy innovation is surging homeland, the research on policy innovation diffusion does have a great significance in both theory and application aspects. This paper, taking residential permit system as a case, seeks the origin and history, then sketches the temporal route of policy diffusion by collecting a large amount of legal documents, newspapers and magazines. By combing the diffusion mechanism and mode, the paper puts forward to three kinds of diffusion modes:leapfrog mode by learning and competing, top-bottom mode under power and pilot-diffusion mode by exploring. The paper demonstrates that the construction of a sharing platform of policy innovation and diffusion nationwide and intensifying the propaganda to typical model are able to accelerate the broadcasting of the policy. And it also shows that it is not preferable for the superior level to promote the diffusion concerning income policy, because its diffusion is actually rapid and active. On the contrary, it is preferable for the superior level to promote the diffusion concerning welfare policy, which will increase the government's spending.