As anticipated after Mao’s death, there was a power struggle for control of China. On one side was the left wing led by the Gang of Four, who wanted to continue the policy of revolutionary mass mobilization. On the other side was the right wing opposing these policies. Among the latter group, the restorationists, led by Chairman Hua Guofeng, advocated a return to central planning along the Soviet model, whereas the reformers, led by Deng Xiaoping, wanted to overhaul the Chinese economy based on market-oriented policies and to de-emphasize the role of Maoist ideology in determining economic and political policy. Eventually, the reformers won control of the government. Deng Xiaoping, with clear seniority over Hua Guofeng, defeated Hua in a bloodless power struggle a few years later.

The Chinese government officially regards Mao as a national hero. In 2008, China opened the Mao Zedong Square to visitors in his hometown of central Hunan Province to mark the 115th anniversary of his birth.

There continue to be disagreements on Mao's legacy. Some historians claim that Mao Zedong was a dictator comparable to Hitler and Stalin, with a death toll surpassing both. Mao was also frequently compared to China's First Emperor Qin Shi Huang, notorious for burying alive hundreds of scholars, and liked the comparison. During a speech to party cadre in 1958, Mao said he had far outdone Qin Shi Huang in his policy against intellectuals: "He buried 460 scholars alive; we have buried forty-six thousand scholars alive... You [intellectuals] revile us for being Qin Shi Huangs. You are wrong. We have surpassed Qin Shi Huang a hundredfold."

Mao's English interpreter Sidney Rittenberg wrote in his memoir The Man Who Stayed Behind that he believes Mao never intended to cause the deaths and suffering endured by people under his chairmanship. In his remarks on the matter Rittenberg has declared that Mao "was a great leader in history, and also a great criminal because, not that he wanted to, not that he intended to, but in fact, his wild fantasies led to the deaths of tens of millions of people." Li Rui, Mao's personal secretary, goes further and claims he was dismissive of the suffering and death caused by his policies: "Mao's way of thinking and governing was terrifying. He put no value on human life. The deaths of others meant nothing to him." Biographer Jung Chang goes further still and argues that Mao was well aware that his policies would be responsible for the deaths of millions. While discussing labor-intensive projects such as waterworks and making steel, Chang claims Mao said to his inner circle in November 1958: "Working like this, with all these projects, half of China may well have to die. If not half, one-third, or one-tenth - 50 million - die."

The United States placed a trade embargo on the People's Republic as a result of its involvement in the Korean War, lasting until Richard Nixon decided that developing relations with the PRC would be useful in dealing with the Soviet Union.

Mao's military writings continue to have a large amount of influence both among those who seek to create an insurgency and those who seek to crush one, especially in manners of guerrilla warfare, at which Mao is popularly regarded as a genius. As an example, the Communist Party of Nepal (Maoist) followed Mao's examples of guerrilla warfare to considerable political and military success even in the 21st century. Mao's major contribution to the military science is his theory of People's War, with not only guerilla warfare but more importantly, Mobile Warfare methodologies. Mao had successfully applied Mobile Warfare in the Korean War, and was able to encircle, push back and then halt the UN forces in Korea, despite the clear superiority of UN firepower.

Mao's poems and writings are frequently cited by both Chinese and non-Chinese. The official Chinese translation of President Barack Obama's inauguration speech used a famous line from one of Mao's poems. John McCain misattributed a campaign quote to Mao several times during his 2008 presidential election bid, saying "Remember the words of Chairman Mao: 'It's always darkest before it's totally black.'"

The ideology of Maoism has influenced many communists, mainly in the Third World, including movements such as Peru's Shining Path, Party of Labour of Albania, Afghanistan Liberation Organization, Cambodian People's Party, and the Communist Party of Nepal (Maoist). The Revolutionary Communist Party, USA also claims Marxism-Leninism-Maoism as its ideology, as do other Communist Parties around the world which are part of the Revolutionary Internationalist Movement. China itself has moved sharply away from Maoism since Mao's death, and most people outside of China who describe themselves as Maoist regard the Deng Xiaoping reforms to be a betrayal of Maoism, in line with Mao's view of "Capitalist roaders" within the Communist Party.

As the Chinese government instituted free market economic reforms starting in the late 1970s and as later Chinese leaders took power, less recognition was given to the status of Mao. This accompanied a decline in state recognition of Mao in later years in contrast to previous years when the state organized numerous events and seminars commemorating Mao's 100th birthday. Nevertheless, the Chinese government has never officially repudiated the tactics of Mao. Deng Xiaoping, who was opposed to the Great Leap Forward and the Cultural Revolution, has to a certain extent rejected Mao's legacy, famously saying that Mao was "70% right and 30% wrong".

In the mid-1990s, Mao Zedong's picture began to appear on all new renminbi currency from the People’s Republic of China. This was officially instituted as an anti-counterfeiting measure as Mao's face is widely recognized in contrast to the generic figures that appear in older currency. On March 13, 2006, a story in the People's Daily reported that a proposal had been made to print the portraits of Sun Yat-sen and Deng Xiaoping.

In 2006, the government in Shanghai issued a new set of high school history textbooks which omit Mao, with the exception of a single mention in a section on etiquette. Students in Shanghai now only learn about Mao in junior high school.