Tourism is growing rapidly in Xishuangbanna Dai Autonomous Prefecture located in southern Yunnan. Tourism is now regarded as a leading industry in the development of this Prefecture. This paper outlines the nature and pattern of development of tourism in Xishuangbanna Prefecture. Features of this tourism such as average length of stay of tourists in the Prefecture, the level of their expenditure, its composition, type of tours available and taken are highlighted. Tasks being undertaken to improve facilities for tourism and its management are discussed. Obstacles to the development of tourism in this prefecture are also noted. Tourism in Mengla County, the last country in the Prefecture to be opened to tourism, is discussed as a particular case and. special attention is given to the role which Xishuangbanna State Nature Reserve is playing in the development of ecotourism, including the involvement of local communities in this development. A master plan has been drawn up for tourism development in Xishuangbanna State Nature Reserve and this ambitious plan is outlined and examined. Ecotourism development in this prefecture needs to have a sound financial basis as well as to support the conservation of its rich biodiversity. Involvement of local communities, such as is occurring near Mengla, can assist in this regard.