Labor dispute mediation system has suffered various realistic dilemmas in practice, which hinders the display of its value and functions. The enterprises are not active in establishing labor dispute mediation committee and therefore are insufficient in mediation; the settlement rate of labor dispute mediation system is relatively low, which leads to the high proportion of arbitration and lawsuit even after the mediation; the credibility of labor dispute mediation system has much room to be improved. Therefore, in order to reconstruct China’s labor dispute mediation system, the system is to be backed by the government and participated by multiple parties, regional and industrial labor dispute mediation organizations should be established and improved, professional mediators are to be selected, the applicable rules are to be fixed, the legal validity of the mediation agreement should be reinforced, the docking mechanism between labor dispute mediation system and arbitration and lawsuit system is expected to be sorted out, a “massive mediation” system ought to be vigorously constructed.