With rapid economic growth and massive urbanization, China faces the problem of municipal solid waste (MSW) disposal and the pressing need for development of alternative energy. Waste-to-energy (WTE) incineration, which recovers energy from discarded MSW and produces electricity and/or steam for heating, is recognized as a renewable source of energy and is playing an increasingly important role in MSW management in China. This article provides an overview of the WTE industry, discusses the major challenges in expanding WTE incineration in China, namely, high capital and operational costs, equipment corrosion, air pollutant emissions, and fly ash disposal. A perspective on MSW as a renewable energy source in China is also presented. Currently, only approximately 13% of MSW generated in China is disposed in WTE facilities. With the significant benefits of environmental quality, the reduction of greenhouse gas (GHG) emissions, and government policies and financial incentives as a renewable energy source, WTE incineration industry is expected to experience significant growth in the coming decade and make greater contribution to supplying renewable energy in China.