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In the mountains of northwest Yunnan, China, a valuable mushroom, matsutake or song rong (Tricholoma matsutake) was commodified in the 1980s. Since that time, it has been exported in large quantities to Japan. The sale of matsutake now contributes more to the income of Shangri-la County (Diqing Autonomous Tibetan Prefecture) than any other crop, including timber and livestock. During the 1980s and 1990s, villagers in this remote region used their mushroom earnings to build spacious, beautiful new houses in the traditional local (Kham) style, and in some cases to buy motor vehicles or open businesses. In villages with access to productive matsutake habitat, virtually every household was able to build a new house; entire villages were transformed. During the 1990s, several villages developed locally based management regimes to enhance production and to address the problems and conflicts that arose from the harvest of such a valuable product. More recently, government agencies and NGOs have played a highly visible role in promoting "sustainable" harvest policies. The implications of their involvement are briefly examined and the future of matsutake harvest in Yunnan is discussed. [ABSTRACT FROM AUTHOR]