The letter says freedom of expression is promised in the Chinese constitution but not allowed in practice.
They want people to be able to freely express themselves on the internet and want more respect for journalists.
The call comes just days after the Chinese dissident Liu Xiaobo was awarded this year's Nobel Peace Prize.
Mr Liu was sent to prison for 11 years in 2009 for expressing his desire to see peaceful political change in China.
The letter's release also comes ahead of a key party meeting that is expected to promote future leaders and shape policy for the next few years.
The authors of the letter describe China's current censorship system as a scandal and an embarrassment.
Many who signed the letter were once influential officials.
One author is a former personal secretary to the revolutionary leader Mao Zedong and a former editor of the official People's Daily newspaper.
They make eight specific demands - all designed to enhance Chinese people's right to express themselves in public.
They say people who lived in Hong Kong while it was still a British colony enjoyed more freedom than is currently allowed in mainland China.
The letter is addressed to the National People's Congress, China's parliament.
It was widely available on the internet - although it has already been taken down from many websites.
13 October 2010 Last updated at 06:11 ET