This paper explores the founding and early development of the department of physics at Christian Yenching University in Peking (Beijing). It shows how this small physics department evolved into a major cradle of physics researchers in China over the period of the 1920s and 1930s. It will demonstrate the indispensable contributions from the Rockefeller Foundation and American physicists, such as William Warren Stifler (1883-1954), Charles Hodge Corbett (1881-1963), and Paul Alexander Anderson (1898-1990), to the growth of the physics department as well as the advancement physics research and education in Republican China.