China's famous historical and cultural city protection system is the result of the combination of the international environmental change led by UNESCO and the change of domestic understanding of historical and cultural heritage. With the changes of relevant laws and regulations and development strategies, the development process of famous historical and cultural city protection system was divided into three periods: quantitative expansion period, Institutional improvement in the transitional period and normative development period. Taking the most representative famous historical and cultural cities above the sub-provincial level among 16 famous historical and cultural cities as the analysis object, this paper makes a detailed analysis of the protection regulations and protection planning of famous historical and cultural cities. From February 1982 to may 2018, 135 national famous historical and cultural cities were designated. There are 135 cities, 15 cities in Huabei area, 6 cities in Northeast China, 47 cities in Huadong area, 30 cities in Southwest China, 17 cities in Southwest China. The types of famous historical and cultural cities can be divided into eight types: historical ancient capital type, traditional landscape type, scenic spot type, regional specialization type, special function type, modern historical site type, general historical site type, and compound type. The contradiction between cultural relics protection, traditional culture inheritance, and commercial development is a major problem to be solved in the current famous historical and cultural city protection system. To improve the relevant laws and regulations of famous historical and cultural cities in the future, firstly, the national laws and regulations on famous historical and cultural cities and the protection system of famous historical and cultural cities in various regions should be coordinated to provide a systematic institutional basis for the protection of famous historical and cultural cities. Second, the concept of “cultural ecology and environmental protection” combining “point-line-area” should be pursued to ensure the coordination of urban cultural city space protection and construction development. It is necessary to strengthen social supervision by introducing a public interest litigation system. To improve the management mode of famous historical and cultural cities, we should first formally standardize the national standards for the recognition of famous historical and cultural cities. Second, after the application and designation procedures of famous historical and cultural cities are completed, the registration system should be implemented. Third, it is necessary to implement the exit system and follow-up management of famous historical and cultural cities. Fourth, in the process of establishing protection regulations, expanding the participation of residents, encouraging the activities of non-governmental protection organizations, and ensure the diversification of protection financial resources. Fifthly, to deal with disasters, we should formulate emergency measures. Sixth, we should pay attention to the protection of intangible cultural heritage with dynamic characteristics. The protection and utilization of famous historical and cultural cities are not antagonistic. In the long run, the increase of the cultural value of historical and cultural heritage and sustainable regional development will go hand in hand in the protection and utilization of famous historical and cultural cities in China.