The Vimalakirti Sutra shows the distinctive ideal of “lay bodhisattvas,” different from most other Buddhist sutras. Moreover, the sutra’s content and form are also unique. The thought and stories in the sutra have had a profound influence on Chinese literature, making the sutra extremely important to Chinese Buddhist householders and Chinese literature. Three translations of the Vimalakirti Sutra can be seen in the existing Chinese Buddhist Canon, among which the Kumārajīva version has enjoyed enduring popularity. Most of the Dunhuang manuscripts expounding the sutra, as well as literary works with allusions referencing the sutra, is based on this version. The version’s wide acceptance is presumably related to features of the translated text, which is read and understood by Chinese Buddhists. Hence, it is important to consider the literary merit of the translations, as well as the circulation of commentaries on the sutra. To thoroughly review the related literature and prepare for future studies on the Vimalakirti Sutra and Chinese literature, this article explores the following issues: the comparison of the three existing Chinese translations; the review of commentaries by ancient masters; the literary merit of the translations; and the sutra’s impact on Chinese culture and literature. This article suggests two possible directions for future studies on the Vimalakirti Sutra in the literary field: the literary merit of the sutra’s text itself and the sutra’s influence on Chinese culture and literature. The latter one can be further divided into three parts: 1) the story of Vimalakirti and the Buddhist householder in Chinese; 2) literary images that originate from the sutra’s key ideas; and 3) how different literary genres including fiction, poetry, prose, drama and so on draw from the sutra.