Terms of the deal were not disclosed, but the two companies said the Netflix-style service will begin next month, for any Alibaba customer with a set-top box.
Among thousands of other titles, Lionsgate owns the rights to popular movies such as Twilight, The Hunger Games and the TV show Mad Men.
Alibaba is preparing for an IPO in New York later this year, in what could possibly be the most valuable technology stock offering ever. The company handled almost $250 billion worth of products sold online last year, according to regulatory filings.
"This cooperation signals our ongoing commitment to advance our vision of making digital media entertainment available to our customers anywhere, anytime," Patrick Liu, Alibaba's president of digital entertainment, said in a joint statement announcing the deal.
In exchange for offering up their collection of North American hits, Lionsgate gains a toehold of access to China's lucrative and growing film industry.
China's movie market has grown rapidly to become the second-largest in the world after America's. Chinese cinemas are expected to gross almost $6 billion this year. That's the second-largest total on earth, just behind Hollywood's receipts but ahead of what Bollywood movies take in.
The major North American studios have already started kowtowing to the growing Chinese market in subtle ways. Paramount's summer blockbuster Transformers: Age of Extinction was partly filmed in China, and last year's Iron Man 3 was specifically targeted to Chinese audiences by including cameos by Chinese celebrities that were filmed in China and only included in the Chinese version of the movie.
"The combination of Alibaba’s tremendous knowledge of the Chinese market and Lionsgate’s content leadership provide [this new partnership] with unique competitive advantages, and we look forward to continuing our close collaboration with the Alibaba team," Lionsgate's chief operating officer Brian Goldsmith said.