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While labor protests are prominent in China, labor NGOs are becoming increasingly conservative. Fewer organizations are willing to engage in agitation activities, and the working-class identity is also fading away among labor activists. Based on three rounds of ethnographic research between 2012 and 2017 and a unique archive I assemble, this article seeks to explain the phenomenon. Adopting a relational approach for studying the public sphere, I examine the rise and the transformation of labor NGOs and contend that the critical mechanisms are the changing boundaries of the labor counterpublic. In the 1990s and 2000s, it was critical intellectuals who created the counterpublic and integrated the fragmented labor activism, though this integration was hasty and full of power inequality between intellectuals and grassroots activists. Later, the state’s target elimination and the rise of domestic fundraising channels successfully weakened critical intellectuals’ monopolization in the counterpublic, and therefore reduced the inequality between intellectuals and grassroots activist. However, leaving critical intellectuals’ support, labor NGOs were not sufficiently powerful to withstand the encroachment of the authoritarian state and the capitalist market. As a result, these organizations’ capacity to formulate a countermovement subsided.