In 156 BC, Emperor Wen of Han died, and Crown Prince Liu Qi ascended the throne, historically known as Emperor Jing of Han.
During the reign of Emperor Wen of Han, Chao Cuo's administrative talents earned widespread praise; he served as the teacher of Crown Prince Liu Qi and was revered as a "wise counselor." After Emperor Jing ascended the throne, he appointed Chao Cuo as the Grand Secretary of the Inner Court and frequently discussed state affairs with him. Chao Cuo had a deep understanding of Xiongnu society and their military strategies, offering numerous military recommendations; he drew many beneficial policies for the state and its people from the reasons behind the fall of the Qin Dynasty; he also strongly advocated for agricultural development to enhance social productivity.
Emperor Jing often met alone with Chao Cuo to discuss state affairs, and many of Chao Cuo's suggestions were adopted by the emperor. Although Chao Cuo was only a Palace Secretary at the time, he enjoyed even more favor from the emperor than the Nine Ministers. Many laws of the Han Dynasty were implemented based on his recommendations. Seeing Chao Cuo so favored, Prime Minister Shen Tu Jia became displeased, but unable to find a way to remove Chao Cuo from the emperor's side, he quietly waited for an opportunity. Soon, Shen Tu Jia received news that Chao Cuo planned to open a door on the south wall of his official residence, which was a serious matter. It turned out that Chao Cuo's office was located directly in front of the Temple of the Supreme Ancestor (the temple of Liu Bang's father), with its main gate facing east, making entry and exit very inconvenient—one had to walk halfway around the building to reach the street. So Chao Cuo intended to open another door on the south side for easier access. However, to open this door, he would have to break through the outer wall of the Supreme Ancestor's temple. Shen Tu Jia saw this as a rare opportunity and planned to report it to the emperor to have Chao Cuo sentenced to death. When Chao Cuo learned of this, he rushed to the emperor and explained the situation. The emperor, upon hearing this, believed Chao Cuo was not at fault, as he had only broken through the outer wall without damaging the temple walls of the Supreme Ancestor. Shen Tu Jia, fully expecting to have Chao Cuo put to death, was instead dismayed to find the emperor still siding with him. Angry and humiliated, Shen Tu Jia fell ill shortly after returning home, grew despondent, and died of illness not long after.
In 155 BCE, Emperor Jing appointed the Censor-in-Chief Tao Qing as Chancellor and promoted Chao Cuo to the position of Censor-in-Chief. Upon taking office, Chao Cuo's first action was to propose to Emperor Jing the reduction of the power of the feudal lords.
During the reign of Emperor Wen of Han, Chao Cuo repeatedly proposed the policy of reducing the power of feudal princes. Emperor Wen greatly valued Chao Cuo's talents, but on the issue of the princes, he did not adopt his advice. However, the then Crown Prince, later Emperor Jing, strongly agreed with Chao Cuo's views, while the ministers shared Emperor Wen's opinion. Apart from Chao Cuo, Jia Yi had also suggested reducing the princes' power, but he advocated allowing each prince's sons to establish their own kingdoms by dividing the lands from their father's fiefs. This way, the number of princes would increase, but each would hold less land, naturally weakening their collective power. Although Emperor Wen adopted Jia Yi's suggestion, the princes were full of complaints, and many ministers also opposed this approach, so the conflict between the princes and the emperor was not resolved.
Chao Cuo explained to Emperor Jing in detail the importance of reducing the power of the feudal princes. When Emperor Gaozu of Han made a solemn oath to only enfeoff nobles with the same surname as the imperial family, the power of these princes grew excessively large. The territories of just three kingdoms—Qi, Chu, and Wu—accounted for half of the Han Empire. If they rebelled, the consequences would be unimaginable. Some princes who committed crimes should be punished by having their lands reduced, with the confiscated territories taken over by the imperial court. Among the princes, Liu Pi, the King of Wu, posed the greatest threat. During the reign of Emperor Wen, Liu Pi's son, while playing chess with the crown prince Liu Qi (later Emperor Jing), inadvertently offended the prince and was killed by him with a chessboard. From then on, Liu Pi harbored resentment and even feigned illness to avoid attending court in Chang'an. This was a capital offense, but Emperor Wen, pitying him for losing his son, only symbolically sentenced him to caning and did not intend to punish him further. However, Liu Pi did not appreciate this. Relying on the copper mines in his territory and its eastern coastline, he openly minted coins, boiled seawater to produce salt, and recruited people from all over, making his intention to rebel widely known.
Chao Cuo further analyzed that Liu Pi would rebel sooner or later, and it was far better to reduce some of his fiefdom earlier than to not reduce it at all or to do so later. Once his power was weakened, even if he still rebelled, the impact on the Han Dynasty would not be too great. It must be said that Chao Cuo's foresight was not wrong, and his reasoning was also correct; however, this time, the ministers still did not approve of reducing the fiefs. They believed that Chao Cuo's method of reducing fiefs was even more hasty than Jia Yi's and could lead to severe negative consequences.
Emperor Jing ordered all civil and military officials, along with members of the imperial clan, to discuss the reduction of feudal states. Everyone knew that Emperor Jing certainly agreed with Chao Cuo's opinion, so no one opposed it except Dou Ying. Dou Ying and Chao Cuo argued for a long time in the court, and the two thus developed a grudge. After the discussion ended, Emperor Jing issued an edict to reduce the Changshan Commandery of the King of Zhao, six counties of the King of Jiaoxi, and two counties each from the Kings of Chu and Wu. Chao Cuo also made some adjustments to thirty articles of the Han legal code, which provoked even fiercer opposition from the feudal kings.
After hearing about these matters, Chao Cuo's father traveled a thousand miles from his hometown to Chang'an, hoping to persuade Chao Cuo to stop the policy of reducing the power of the feudal states. Chao Cuo comforted his father, saying that he was wholeheartedly devoted to the state and had long placed life and death aside. His father said in anguish, "Can you bear to bring disaster upon the Chao family because of your actions?" Chao Cuo was deeply pained inside, but for the sake of the nation's security, he resolutely chose to persist. Seeing that he could not convince his son, the father returned home with regret and worry, and soon after, he took his own life. When Chao Cuo heard the news, he wept bitterly.
Liu Pi, the Prince of Wu, seeing that Emperor Jing had reduced the territories of several feudal princes, realized that his own domain would soon be threatened. He then took the initiative to contact other princes, declaring war on the imperial court under the pretext of killing Chao Cuo. In reality, Liu Pi aimed to seize power and usurp the throne, with killing Chao Cuo serving merely as an excuse.
A total of seven vassal states participated in the rebellion, historically known as the "Rebellion of the Seven States." Emperor Jing of Han was terrified by the momentum of the seven-state army and hastily consulted with his ministers to discuss countermeasures. Dou Ying took the opportunity to join forces with Yuan Ang to plot against Chao Cuo, directing all blame toward him. Yuan Ang also had a grudge against Chao Cuo, and the two were irreconcilable. Yuan Ang reported to Emperor Jing that Chao Cuo's policy of reducing vassal states was not for the country's benefit but out of personal vendetta, and he confidently assured the emperor that Liu Pi, the King of Wu, had no intention of rebelling at all. This greatly changed Emperor Jing's impression of Chao Cuo. After much deliberation, since the vassal kings believed Chao Cuo had harmed their interests, he decided to simply kill Chao Cuo to appease the anger of the vassals.
Emperor Jing of Han then appointed Yuan Ang as Grand Master of Ceremonies, sending him as an envoy to the Wu Kingdom to persuade the Wu king to withdraw his troops. Several key ministers in the court opportunistically submitted a memorial condemning Chao Cuo, requesting the emperor to sentence him to death by waist cutting. Following the ministers' wishes, Emperor Jing ordered Chao Cuo's arrest. The Commandant of the Capital went to Chao Cuo's home, falsely claiming that the emperor had summoned him to the palace. Only when the carriage reached the Eastern Market of Chang'an did the commandant read the emperor's edict to Chao Cuo. This loyal minister, who had devoted himself entirely to the state, ultimately met his end by waist cutting, and all his clan members were also executed.