This paper studies 148 related and 169 unrelated acquisition cases conducted by Chinese listed firms from 2001 to 2004 and explores firm and industry characteristics of these firms prior to their acquisition. Results show that there are significant pre-acquisition differences between firms pursuing related acquisition and firms pursuing unrelated acquisition in terms of firm performance, business risk, firm size, proportion of state shares and degree of diversification profile. Except for differences in internal capital as represented by undistributed profit per share, there is no significant difference in other aspects of available resources and industry performance.