ABSTRACT: A study was conducted among Chinese–English bilingual teachers from the People's Republic of China (PRC) to find the sociolinguistic and social psychological factors affecting their choice of codes when interacting among themselves, and the functional and linguistic features of their code‐mixing behaviour. Findings indicated that participants and their role relationship, topic, setting, the speaker's social psychological motivation, and his/her perception of his/her social reality all affected the bilinguals' choice of codes, and that socio‐cultural norms exerted an overall influence as well. Three functions of code‐mixing by the subjects were identified as: (1) to achieve ease of expression, (2) to achieve articulateness and simplicity, and (3) to produce rhetorical effect. Linguistically, transfer occurred at the lexical, phrasal, clausal and sentential level, but not at the morphemic level. The code‐mixed texts were all marked by textual cohesion and functional appropriateness.