Using recent, nationally representative data, we examine the prevalence and social determinants of premarital cohabitation, an important sign of the Second Demographic Transition (SDT) in China. Descriptive results show that although only about 7 percent of Chinese adults born before 1980 cohabited before first marriage, cohabitation has grown sharply among recent birth cohorts. Based on the theoretical perspectives of “ideational change” and “economic development,” we conduct multivariate analyses of social determinants of cohabitation that may reveal potential mechanisms of its diffusion. We find that greater exposure to Western culture, higher educational attainment for men, and more advantaged family background were all positively related to premarital cohabitation. Our results also show the influence of a unique social institution in China, with Communist Party members less likely than their counterparts to cohabit before first marriage. Broadly speaking, the positive association between economic development and local rates of premarital cohabitation suggests the transformative influence of modernization on family systems.