Charismatic forms of healing can be found both in Chinese medicine and spiritual practices. This article examines how qigong healing sects in contemporary China became subject to state regulation and medicalization. Such a move was intended to eradicate masters who were viewed as promoting superstition (mixin) or heterodox spiritual practices. Yet, the rise of masters who intertwined healing with spirituality was facilitated by market reforms that enabled entrepreneurial forms of medicine. When other popular forms of healing emerged in the late 1990s, the previous state response to qigong facilitated containment practices which continue into the 21st century. Recent state policy towards sectarian organizations based on the promotion of science are compared with the regulation of qigong a decade earlier.