Abstract: By critically absorbing the view of formation of modern sports based on structural functionalism and process sociology, combined with the sociology of organization and transaction cost theory of the new institutional economic theory, the study, from macro-, meso-and micro-perspective, respectively, inquires into the environment mechanism, legitimacy mechanism, and the efficiency mechanism of the formation of sport competition organization.With the individual action being logical starting point, it investigates the relationship among the three mechanisms in the dimensions of time and space, forming a synthetically understanding logic of the formation of sport competition organization.It also makes an analysis on the cultivation mechanism of current folk sport competition organization from two perspectives of self growth and the limited government efforts.