This study investigates the historical development of the Zhudi (Chinese bamboo flute) in Shandong Province, China, through an analysis of its organological evolution, performance practice, and cultural transmission. Drawing on archaeological findings, historical records, and qualitative fieldwork—including interviews with key practitioners—the research traces the transformation of the instrument from prehistoric bone flutes to its modern professional and institutionalized forms. The findings indicate that the Zhudi developed not only as a musical instrument but also as a dynamic cultural system shaped by social change, regional identity, and technological innovation. From early bone flutes at Jiahu and related sites to the transition from bone to bamboo, the instrument gradually achieved structural refinement. It flourished in court and popular contexts during the Qin–Han and Tang–Song periods, while the Ming–Qing era established the stylistic distinction between Bang-dizi and Qu-dizi traditions. In the twentieth century, modernization through solo repertoire, professional training, and technical innovations further expanded its artistic scope. In Shandong, master performers such as Qu Xiang contributed significantly to the formation of a distinctive regional style. The study concludes that the Zhudi’s continuity relies on the dynamic interaction between tradition and innovation within China’s contemporary cultural landscape.