This research studies the responses of two lower-level courts, one in rural and the other in urban China, to recent judicial reforms focusing on strengthening institutional building and professionalism. It finds that the court-funding structure under which the courts heavily rely on the local government for expenses, together with the unbalanced development of local economy, remarkably affects the two courts' behavioral pattern in different ways. The rural court, for the sake of litigation fees, tries to attract potential litigants to file certain lawsuits, even though it cannot effectively handle them. The efforts toward institutional building and professionalism only aggravate the already difficult situation. The urban court's institutional quality seems to have increased in the reform process, thanks to sufficient resources from the developed and diversified local economy. But it has also become more formalized and bureaucratic, as it tries to exclude difficult and problematic disputes from getting into the court. In illustrating the complexity of transitional China's judicial reform process generated by both the unbalanced economic development and the bureaucratization of the judiciary, this article suggests that the enhancement of institutional quality, which many argue is key to economic development, may itself be contingent upon the success of economic development.