Chunk decomposition plays an important role in cognitive flexibility in particular with regards to representational change, which is critical for insight problem solving and creative thinking. In this study, we investigated the cognitive mechanism of decomposing Chinese character chunks through a parametric fMRI design. Our results from this parametric manipulation revealed widely distributed activations in frontal, parietal, and occipital cortex and negative activations in parietal and visual areas in response to chunk tightness during decomposition. To mentally manipulate the element of a given old chunk, superior parietal lobe appears to support element restructuring in a goal-directed way, whereas the negatively activated inferior parietal lobe may support preventing irrelevant objects from being attended. Moreover, determining alternative ways of restructuring requires a constellation of frontal areas in the cognitive control network, such as the right lateral prefrontal cortex in inhibiting the predominant chunk representations, the presupplementary motor area in initiating a transition of mental task set, and the inferior frontal junction in establishing task sets. In conclusion, this suggests that chunk decomposition reflects mental transformation of problem representation from an inappropriate state to a new one alongside with an evaluation of novel and insightful solutions by the caudate in the dorsal striatum.