The formation and evolution of public events are often closely related to rumor propagation. This paper takes a public event caused by environmental problems in NC city as an example. Through field investigation and in-depth interview of the event, some enlightening understandings are obtained by taking grounded theory as the research method, Rumor propagation has a significant impact on the direction of public events, Rumor plays in public events have a unique communication mechanism and evolution logic. Simple discourse expression makes rumors rely on strong relationships to achieve consensus. However, after a large number of network media’s forwarding, the imaginary truth makes the rumor code realize the meaning of implosion, and produces a kind of hyper-real experience. Driven by various relationships and group dynamics, rumors develop from implosion to detonation. Moreover, in the context of public events, the rumor discourse and rhetoric of the public need to be reexamined. The revelation given by grounded theory is that rumor is a real imagination, a simple discourse resource and a secluded public opinion landscape.