Tracing back to Huangdi’s Canon of Medicine to study the origin for a TCM theory is a commonly used method in the study of the academic history of Chinese Medicine nowadays.Archaeology fact denies that the theory “liver governs smoothing and dispersing qi” had its beginnings in Huangdi’s Canon of Medicine, which is a consensus of the academia at present though it has been questioned over the past 20 years. The theory that “liver governs smoothing and dispersing” in Gezhi Yu Lun, Further Discourses on the Properties of Things written by Zhu Zhenheng in the Yuan Dynasty (1206-1368) is the first one that endows the liver with the function of smoothing and dispersing. The theory is not cited in the Canon of Medicine thus the formations of its objects, modalities, concepts and strategies should be analyzed in view of the knowledge, ideas and beliefs, or the discourses of the Yuan Dynasty. Elements mentioned in the theory should be separated and the sources and the methods of construction should be discussed one by one. The result is that what the liver soothes and disperses in Zhu Zhenheng’s theory refers to essence – not qi in the modern Chinese theory and it is only a part of the mechanism of “kidney storing, liver soothing, and heart governing” theory by Zhu Zhenheng. Zhu Zhenheng reconstructed the fire theory that essence is stored in kidney, and motivated normally or abnormally by the ministerial fire in kidney and liver which is dominated by the monarch fire in heart after Liu Wansu whose theory is that six climatic exopathogens or five minds transform into fire and Li Dongyuan whose theory is that fire damages qi. The reconstructive strategies came from Yin and Yang dynamic contemplation, mind-nature theory of neo-Confucianism.