Suggesting that cultural hybridity in higher education appears in the form of collaborative colonialism in pre-1997 Hong Kong, this paper begins with a historical review of the establishment of the University of Hong Kong and the Chinese University of Hong Kong. The historical review shows that the universities were seen as projects that could defuse the tension between British colonialism and Chinese nationalism, and even incorporated them, thereby constructing a paradigm of cultural hybridity in colonial Hong Kong. This form of hybridity evolved into a cosmopolitan model, which emphasises the importance of institutional autonomy, the openness, global linkages and cross-cultural capacity of the academic system and Hong Kong’s strategic position in China’s development, in the late colonial and early postcolonial eras. This cosmopolitan model describes the development of Hong Kong’s higher education during the period in general, and justifies the establishment of the Hong Kong University of Science and Technology in particular. The paper observes that this form of cultural hybridity is substantially revealed in the organisational nature and settings of universities, thereby revealing the link between the cultural and institutional dimensions of university governance in Hong Kong. However, recent research indicates that changes, which are deeply interwoven with socio-political dynamics, have been happening in postcolonial Hong Kong and have significantly impacted university governance in the city. Drawing upon 21 semi-structured interviews with university leaders and key stakeholders from major universities in the city, this paper illustrates this delicate balance of Eastern and Western values in university governance and evaluates its sustainability in postcolonial Hong Kong.