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The emergence of online literature in China is a curious phenomenon. Compared to the West, online literature in China differs in two aspects: First, the huge numbers of online writers, work produced, and readers; second, its unique genre and content. While in the West, online literature is largely experimental hypertext, in China they are mainly conventional popular fictions written by amateur writers. In this paper, we examine the phenomenon of amateur writers producing fictions online in China. In particular, we will focus on the writer/reader interaction in this new form of producing literature. Drawing upon four years of online observation and content analysis of the interaction between readers and online writers in Chinese literature websites, we argue that because of the characteristics of the online settings, such as instant feedback, payoff and networked readers, the internet has changed the interactional mode between authors and readers. Creative production of literature has changed from a lonely process, or an interaction between publisher and the author to a dynamic one characterized by authors’ and readers’ constant negotiation. We conclude that a power dynamic forms between writers and readers in which the writers are worshipped and whipped simultaneously by readers. This power dynamic sustains both the production and consumption of online literature, but at the same time it constrains the genre and length of the work produced.