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Scholars have long held that Communist states adopt repressive religious policy based on secular Marxism. However, this “atheism thesis” is more often asserted than empirically tested by historical evidence. Drawing on the primary sources of the religious policy in China from 1949 to 1958, this paper shows that contrary to the conventional wisdom, the Chinese Communist Party (CCP) did not rely on Marxism to justify its repressive religious policy. Instead, in this crucial state-building period, the main political discourses the CCP used to legitimize religious policies on the four major religions in China (Protestantism, Catholicism, Buddhism, and Daoism) were grounded on nationalism and political movement mobilization. This paper also offers an explanation of this choice of policy discourses in the context of the state-building of a new authoritarian country, arguing that the nature of Marxism and nationalism, the insider-outsider positions of the four religions in relation to Chinese traditional culture and their variance in social and economic power, as well as the CCP’s using political movements to achieve the popular mobilization for the state-building goal, combine to explain the structure of religious policy discourses in China of the 1950s. It reveals the hidden bias in the “atheist thesis” that Communist authorities repress religions primarily due to ideological conflict. In contrast, the threat of religions’ substantial organizational resources and how to incorporate religions into the state-building project prove to be more pressing issues in the formation of Communist states’ religious policy discourses.