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The widespread implementation of education policy in China is a process of gradual diffusion from local to nation-wide on the basis of education policy innovations. Taking the County Management and School Recruitment (CMSR) teacher management reform diffusion process in China's 286 cities from 2014 to 2019 as an example, we analyze the diffusion mechanism of education policy innovation among different levels of government. The results show that: (1) the adoption of education policy by municipal governments not only responds to educational demands, but is also influenced by provincial policy and top-down fiscal relations, as well as competitive pressures from peer municipalities; (2) the central government indirectly influences the education policy adoption decisions of municipal governments.