This article elaborates the relationship of Chan (Zen) and Tathagatagarbha-vada and tackles its problem. The tradition holds that Bodhidharma chose the Lankavatara Sutra (Four Chapters Version) as containing his essential teaching of Zen. This legend implies some interesting hints about the relationship between Zen and Tathagatagarbha-vada. The Lankavatara Sutra is the principal text of Tathagatagarbha-vada. Both these two terms of ”Rurai Chan (Tathagatagarbha Chan)” and ”Tathagatagarbha Consciousness” appear in the Lankavatara Sutra (Four Chapters Version). It proves the connections of Chan (Zen) with Tathagatagarbha-vada. Actually, the ”Rurai Chan (Tathagatagarbha Chan)” is the synonym of Tathagatagarbha-vada-Chan.This article explains the reasons how and why the ”Rurai Chan (Tathagatagarbha Chan)” appears in the Lankavatara Sutra (Four Chapters Version), before learning about its importance and meaning for the emergence of Chinese Chan. Chinese Chan masters use ”Rurai Chan (Tathagatagarbha Chan, 如來禪)” in the Lankavatara Sutra as an inspiration to their practices of Zen Buddhism. The Tathagatagarbha doctrine states, for example, that ”self-realization” of wisdom depends on one's faith in Buddha-nature (Tathagatagarbha), and meditating on Buddha-nature within each human being may bring to fruition of enlightenment. This kind of meditative practices differs Rurai Chan from the other two kinds of meditation doctrines, Mahayana Buddhist meditation (Visualization of Buddha and mantra recitation) and Hinayana Buddhist meditation (anaprana).”Rurai Chan” witnesses the transmission of Zen Buddhism from India to China. Its distinctive features defined Zen Buddhism in China in very early times. Under the sixth patriarch Huineng, the Chinese Chan was gradually moving toward ”Appropriation of the Buddha-nature” (見性), central element of the Patriarch Chan (祖師禪), whose teachings are always contrasted with Rurai Chan. Spiritual teachings of the Patriarch Chan focus on ”appropriation of the Buddha-nature” of the present awareness. It emphasizes the great function of the inherent Buddha-nature. This article will discuss alterations of the meaning ”Appropriation of the Buddha-nature” in the Nirvana-sutra (India text) from its interpretation by the sixth patriarch. In the Patriarch Chan, emphasis on ”Appropriation of the Buddha-nature” of the present awareness is based on the Substance-Function theory of the Chinese traditional philosophy. So the style and philosophical approach of Chinese Patriarch Chan is quite different from Indian Tathagatagarbha-vada-Chan. This article uses the Buddhist hermeneutical theory to tackle all these problems in the history of Zen development in China and India.