This paper provides novel evidences for the link between stock return reversals and stock liquidity. Using the data from Chinese A-share stock market for the period between January 1997 and November 2013, the paper examines the stock return reversal effect, the impact of stock liquidity on excess stock returns, and the liquidity-based explanation for stock return reversal effect, respectively. Consistent with previous studies, the paper finds that the stock return reversal effect is significant in Chinese stock market and stock liquidity has a positive effect on excess stock returns. However, inconsistent with the liquidity-based explanation for stock return reversals, our results suggest that stock liquidity is not likely a driver of stock return reversals in Chinese stock market. These results are explained with a demand-supply model, in which stock price manipulations by large institution investors lead to stock return reversals.