The plane landed safely and no passengers were injured.
The Shanghai-based airline said it had arrangements for the passengers.
The flight MU736, from Sydney to Shanghai, had to turn back when a massive hole was ripped in part of its left engine.
An investigation continues while the airline is taking good care of the passengers.
A recording of communication with the tower captured the crew explaining their No.1 engine problem and asking to maintain their current heading. When the disturbance was noticed, the plane was turned around, travelling over Western Sydney before returning to the airport.
China Eastern said crew members on flight MU736 spotted the damage after take-off and chose to return to Sydney Airport, Chinese media reported.
"I am glad we are all safe", she told Nine News.
Another passenger said: "The moment that we took off the wing to my left just started making a massive amount of noise and they cleared all the seats". Looks like the engine casing or cowling has ripped off, forward of the fan the main initial compressor blade, it's ripped clean off. Looks like there's obviously been some preliminary damage in order for that to happen.
The Australia Transport Safety Bureau said it was investigating the incident.
Damage on the engine casing.
One witness telling Seven news, "We like went up in the air and all of a sudden I heard like a 'dit, dit, dit, dit, dit, dit (shuddering noise)' - and it was really really loud, but no-one really panicked while it sort of smelt like burning".