Revision with unchanged content. This study used the naturalistic inquiry method to explore the perceptions of 22 selected administrators from Chinese Ministry of Education Directed universities regarding what kind of institutional challenges their institutions confront and how their institutions function in the present, how their own roles have been affected by the changing situations they face in their own contexts, and consequently, what are the competencies that universities leaders will need in their universities in the near future. Special emphases are placed on the differences that exist in the challenges facing Chinese MOE directed universities located in differently geographical, cultural and economical contexts, and the differences among the perceptions of current university leaders, aspiring leaders, and retired university leaders regarding institutional challenges and leadership competencies. This study yields information that may be useful for the researchers and higher education administrators inside and outside China if they want to understand the current Chinese higher education situation. At least, they can gain some information from these MOE-directed university administrators’ perceptions and experiences. They also can understand the Chinese higher education system through the historical, political, economical, cultural and demographical reviews of the study.