Developing a deeper understanding of scientific concepts is one of the primary goals of science education. To improve students' conceptual understanding, it is necessary to explore the major characteristics of their learning process. Informed by previous work on conceptual understanding, this study focuses on the concept of evaporation, exploring the level division of students' conceptual understanding of evaporation and the development of corresponding test questions. The level-based conceptual understanding assessment was tested on 721 seventh-grade Chinese students before and after the evaporation lesson. The results of quantitative and qualitative analyses indicated that the students' conceptual understanding of evaporation could be divided into three progression levels. Students with a low level of understanding only mechanically remembered the definition of evaporation and could identify evaporation phenomena in their daily lives based on memorized examples. Students with an intermediate level of understanding grasped not only the definition of evaporation but also the factors affecting the evaporation rate. Students with a high level of understanding understood the microscopic nature of evaporation and could explain how these three factors affect the evaporation rate from a microscopic perspective. This study also provides further evidence of the value of grasping the nature of concepts in conceptual understanding.