As the economy of the People's Republic of China (PRC) has continued to grow at an unprecedented rate, the nation as a whole has embarked on a process of substantial cultural shift. Higher education has experienced a massive growth in enrollment. The increased demand for an educated workforce has placed stresses on the public education system, which has created opportunities for private higher education institutions (HEI). This dissertation explores the challenges faced by private HEIs in the PRC, focusing on the phenomena of privatization, massification, and marketization. Case studies of three successful private HEIs, which had been authorized by the Ministry of Education to award bachelor's degrees, are presented. Forty interviews with administrators, instructors, and students were conducted on campuses in Beijing, Shanghai, and Xi'an. Analysis of the interviews showed that the universities have experienced similar developmental challenges in regard to financing, administration, and instruction. A variety of coping strategies were employed by the three private HEIs to facilitate institutional survival and growth. This study demonstrated that private HEIs play a role in satisfying the demand for higher education of students who formerly would not typically have attended a university. However, substantial challenges still exist in the form of a widespread public perception that private HEIs are associated with low educational quality and status. The complications resulting from limited privatization, state-controlled marketization, and lack of equality in education have also shaped the character of these "private universities with Chinese characteristics." Recommendations concerning relaxed funding guidelines, social security system reform, and internationalization suggest a path to expansion and institutional improvement for the private HEIs.