Protected areas are the most effective way to preserve biodiversity and natural heritages for future generations. Since the establishment of the first nature reserve in 1956, numerous protected areas have been established in China, covering forests, grasslands, wetlands, deserts, and marine ecosystems, as well as rare and endangered species and germplasm resources, geological relics, natural landscapes, and important water sources. However, there are still many problems due to the lack of a nationally integrated design, indistinct functional identifications, spatial overlapping among different types of protected areas, and the quantity and spatial allocation of protected areas fall short of meeting the needs of biodiversity conservation and the provisioning of ecosystem services. This situation has resulted in low levels of management effectiveness. At the same time, it provides a valuable opportunity to streamline the existing protected area system and identify different protected area functional orientations, all under government deployment, with national parks as the main framework. Based on analyses of existing protected area types in China, like nature reserve, scenic spot, forest park, wetland park, geo park, desert park, aquatic germplasm resource reserve, etc.; and with reference to protected area system classification experiences from the rest of the world, including United States of America, United Kingdom, Canada, France, Brazil, etc. This paper discusses China's protected area system classification and proposes five categories of protected areas: Category I is nature reserve, including ecosystem reserve, species reserve, and nature relic reserve; Category II is national park; Category III is nature park, including forest park, wetland park, grassland park, desert park, marine park, geo park, scenic spot, and water park; Category IV is germplasm resource reserve, including crop germplasm resource, and aquatic germplasm resource reserve; Category V is ecological function reserve, including water source reserve, national non-commercial forest, other eco-redline areas, cultural forest, and holy mountain and lake, etc. This paper also analyzes the functional orientations and management targets of these protected area categories and provides foundations for future planning of the country's protected area system. For key protection objects, nature reserve are rare and endangered species and germplasm resources, representative ecosystems, and natural relics; national park are rare and endangered species and germplasm resources, representative ecosystems, natural landscapes, and ecosystem services; nature park are representative ecosystems, natural relics, natural landscapes, and ecosystem services; germplasm resource reserve is rare and endangered species and germplasm resources; and ecological function reserve is ecosystem services. The development of China's system will greatly improve the classification of protected areas, create new policies and mechanisms based on their various characteristics, strengthen government management and investment, and promote a whole-of-society strength to protected area development.