Prior to April 2005, only one third of the shares issued by exchange-listed companies in China are publicly tradable. The other two thirds, mainly owned by Chinese government agencies or government-linked enterprises, are prohibited from public trading. On April 29, 2005, the Chinese Securities Regulatory Committee announced a reform plan that aims to abolish the split-share structure by converting all non-tradable shares to be publicly tradable. We investigate the consequences of this unique event and shed light on how increase in share float affects liquidity, speculation and stock prices. Firstly, we find that tradable A-shares command a 60% price premium on average over non-tradable A-shares and this price premium contains both liquidity and speculation components. Secondly, the share structure reform increases share turnover and dampens speculative trading. Relative to control firms, share turnover of restructured firms increases substantially after the reform, with the largest increase (107 %) in firms that had low liquidity and low speculative trading before the reform. In contrast. there is no increase in share turnover of firms that had high liquidity and high speculative trading. Thirdly. stock prices drop substantially on the day when the supply of tradable shares increases due to the reform. Moreover. the higher increase in the supply of tradable A-shares. the larger drop in the stock price. This indicates that the short-term demand curve is downward-sloping. Fourthly. despite the fall in stock prices. shareholder wealth increases by 15% on average. We find that the largest price drop and the smallest wealth gain occurs in firms with the highest speculative trading before the reform. which suggests that share structure reform dampens speculative trading in Chinese market. Lastly, split share reform also benefits the B-share market despite that the reform involves only A shares: B-share turnover increases after the reform and the well-known B share price discount narrows substantially .