The Tiangong-2 space laboratory was launched into orbit on Thursday from a launch facility in the Gobi desert, according to state media reports.
At 10:04 pm local time (1604 GMT), a Long March 2F rocket blasted off to carry the lab 393 kilometres above the earth from the Jiuquan Satellite Launch Centre in China's Inner-Mongolia region, ahead of the planned arrival of a crew of two astronauts in October.
The first Chinese space lab, Tiangong-1, was successfully launched as a preparatory prototype in September 2011 and hosted three brief manned spaceship dockings before ceasing operations in March.
China's space exploration programme has been making rapid progress in the past few years.
Tiangong-2 is intended as a precursor to the building of a full-size manned space station.
The China National Space Programme aims to launch the core module of the space station in 2018 with a goal of completing the station by 2022.
The whole programme is closely supervised by the ruling Communist Party and the People's Liberation Army, both of which are led by President Xi Jinping.
Experts say the successes of the programme are significant for China's one-party rulers to garner support from the population and to boost international prestige.
In 2011, the US Congress ruled that Chinese astronauts would not be allowed on the International Space Station because of national security concerns.