WUHAN, China—Some of today's biggest cybersecurity worries trace their roots to this central Chinese city, where a hacker with a junior high school education slapped cartoon pandas onto millions of computers to hide a destructive spy program.

The Panda Burns Incense computer worm, created by 27-year-old Li Jun, wreaked havoc for months in China in 2006 and 2007, eventually landing Mr. Li in jail. Jumping one computer to another by tricking users into opening what appeared to be a friendly email message, the Panda funneled...