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Daoism, as one of the greatest indigenous philosophical traditions of Chinese culture, exerts a strong influence on the American fiction writer Ursula K. Le Guin’s worldview and her storyworld, especially in The Dispossessed (1974). Although scholars identify The Dispossessed observes utopian traditions in the history of political thought and literature, there has not been a comprehensive discussion on how Le Guin’s Daoist philosophical and utopian insights resonate with the mode of modern utopian thinking, and how they are represented, problematized and interpreted in the novel. This article aims to demonstrate how Le Guin’s Daoist philosophy of Yin – Yang, with mutual generation and promotion beyond balance to one harmony, collides with modern utopian thinking, including Ruth Levitas’s work on utopian ontology, Lucy Sargisson’s transgressive and Tom Moylan’s critical utopian theory. By examining the political systems of the two planets, Anarres (anarchism) and Urras (capitalism), the protagonist physicist Shevek is endowed with a perspective to interrogate two contradictory sets of beliefs with his judgment. The recurring motif of the wall separated two planets and the discovery of the General Temporal Theory work miracles in a Taoist manner. Rather than processing an ideal society, The Dispossessed attempts to elucidate a viewpoint that there is never a perfect and ideal utopia, but we may strive for a multi – balanced utopianism in a dialogical way. The novel offers a dual perspective meditation between two planets, and each of these worlds is essential to the survival of the other. In light of this, Le Guin embraces the outlook of Daoism and pursues a balanced Taoist utopianism, promoting the fusion of Chinese and western culture.