This paper will analyze the historical formation of the theory of Buddhist decadence in the Edo Period. This theory can be regarded as the discourse informed by the following assumptions. First, during the Edo period monks did not keep the precepts, leading lives even more secular than lay people. Second, the Buddhist institution lost its freedom due to its close relationship with the shogunate. In short, Buddhism in early modern Japan was more corrupt than in other historical periods. This theory is regarded as having been formulated in Tsuji Zennosuke's research on early modern Buddhism. However, although he is sometimes presented as the first scholar to introduce this image of decadent early modern Buddhism, the idea was already "common sense" among both scholars and priests by the time Tsuji published his works. Keeping these aspects in mind, this article shall focus especially on the period from the Meiji Restoration (1868) to the publication, in 1931, of Tsuji Zennosuke's Nihon Bukkyo shi no kenkyu zoku hen, where the theory of Buddhist decadence can be found in its more systematic format.