Market liquidity is determined by the interplay between liquidity providers and liquidity consumers.Employing a rational expectations equilibrium framework, this article delves into the effects of investor composition on the liquidity‘provider-consumer’structure and the formation mechanism of liquidity in the Chinese Stock Market, focusing on the order behaviors of various investor types in the limit order book.The model incorporates three distinct categories of traders: Informed, uninformed, and noise traders, and explores the strategic interactions not only between informed traders and uninformed traders but also within uninformed traders.Our findings reveal that both informed and uninformed traders predominantly utilize limit orders to supply liquidity, thereby influencing the market’s liquidity formation. The model highlights that uninformed traders are more active liquidity providers compared to informed traders; However, an increase in outstanding unexecuted limit orders among uninformed traders deteriorates overall market liquidity. Interestingly, limit orders placed by informed traders can regulate the competition of uninformed traders, thus enhancing liquidity. The study further identifies that the relative proportion of uninformed to noise traders significantly impacts the liquidity ‘provider-consumer’structure. Moreover, it is observed that higher stock price volatility diminishes the influence of this ‘provider-consumer’ dynamic, leading to a more stabilized liquidity structure predominantly governed by ‘informed-noise’ interactions.