More than 20 cities in the country's northeast, including Beijing, had been under a pollution "red alert".
The crisis spurred a call by Chinese President Xi Jinping for the country to develop clean energy sources during a meeting of a high-level government body on Wednesday.
Xi urged northern China to substitute natural gas and electricity for coal to heat buildings during the winter in order to reduce smog, the official Xinhua news agency reported.
More than 20 cities in the country's northeast, including Beijing, had been under a pollution "red alert" -- the highest of a four-tiered, colour-coded warning system -- until Thursday.
Some 460 million people were affected by the blanket of smog, according to environmental group Greenpeace -- more than the entire population of the US.
Shijiazhuang, the capital of Hebei province, was the city hardest hit on Wednesday, with elementary schools and kindergartens closed, some factories shuttered, and cars taken off the roads.
Hundreds of flights in the region were also cancelled and road and rail transport ground to a halt under the low visibility conditions.
Levels of PM 10 -- a measure of larger particulates in the atmosphere -- were literally off the charts in Shijiazhuang, repeatedly maxing out at 999.
Levels of the smaller PM 2.5 particles, tiny enough to be absorbed into the bloodstream and thought to be a major contributor to respiratory and cardiovascular disease, reached more than 29 times the World Health Organization's daily recommended maximum.
The alerts in the capital and elsewhere were lifted in the early hours on Thursday, as a cold wind from the northwest arrived to blow away the toxic pollution.
Within hours, PM 2.5 levels in Beijing dropped by some 90 percent.
Most of the country's greenhouse gas emissions come from the burning of coal for electricity and heating -- particularly when demand peaks in winter.