This essay explores the impact of governance on the Chinese religious landscape during the early years of the People’s Republic of China (PRC) through a case study of the Young Buddhist Association (YBA) of Shanghai. Despite the official atheist ideology of the Chinese Communist Party, during this era of New Democracy the YBA experienced Communist governance in practice as a process of political incorporation rather than coercive eradication. As its Buddhist youth movement not only survived the Communist takeover in 1949 but gained momentum well into the 1950s, the YBA was propelled to the forefront of the Buddhist community in Shanghai and became the most active and influential grassroots Buddhist organization in the early PRC. The case of the YBA demonstrates that incorporation into the new political order of the 1950s had transformative effects on the spatial construction, identity formation, and social dynamics of religious communities that cannot be reduced to steps toward their eventual elimination during the Cultural Revolution.