This thesis studies the relationship between the ecosystem services of the Nujiang Valley in Yunnan province in south-west China and the wellbeing of the local population, and how this relationship will be influenced by hydropower development on the Nujiang (Salween River). The Nujiang Valley is a culturally and biologically diverse border region between China and Myanmar of great natural beauty. The steep gorges and steadily dropping Nujiang make the area extremely attractive for hydropower development. The plans to develop hydropower on the Nujiang were presented in 2003. Fierce opposition from environmental NGOs, scientists, journalists both in China and abroad, combined with support from the environmentally inclined Chinese central government officials led to the suspension of the Nujiang hydropower development project in 2004, until 2013. In the 12th five-year plan on energy development several locations on the Nujiang are presented as key bases for hydropower development in the coming years. The analysis in this thesis is based on data collected during fieldwork in the Nujiang Lisu Autonomous Prefecture in October and November 2013, and the data is analysed within the framework developed for the UN Millennium Ecosystem Assessment (2005). The findings in the thesis indicate that the wellbeing of the villagers in the remote and less developed parts of the prefecture is to a large extent dependent on the services provided by the local ecosystems, and dramatic degradation of the ecosystems caused by large-scale dam construction will lead to a significant decrease in human wellbeing. On the other hand, the wellbeing of most of the villagers in the less remote and more developed part of the prefecture is not directly dependent on the services of the local ecosystems, and it is likely that in the short-term human wellbeing will be positively influenced by dam construction, which will create new employment opportunities and bring increased modernization to the area.