Improving the Chinese capital market requires better regulation, deeper reforms, and innovation. CSRC’s random inspection system represents a significant innovation in regulatory philosophy and approach, representing a profound transformation of the regulatory system. Liquidity is often regarded as the “vitality” of a capital market. This paper takes stock liquidity as an entry point to study how random supervision affects the capital market performance of listed companies. The findings indicate that random supervision generally results in a decrease in the stock liquidity of listed companies. However, effective internal corporate governance and external market supervision can significantly mitigate the negative impact of random supervision on stock liquidity. The channel tests demonstrate that random supervision ultimately reduces firms’ stock liquidity by exacerbating the uncertainty of firms and increasing information asymmetry among investors. The research conclusions offer valuable insights in deepening “deregulation and service” and “improving the function of the capital market”, both of which were highlighted by the Party’s 20th National Congress.