As a bridge between city and countryside, industry and agriculture, producer and consumer, Rural Supply and Marketing Cooperatives (RSMCs) play a key role in distributing commodities and purchasing rural products for some 800 million people in China. While overall national economic reform started in 1978, the reform of RSMCs began 4 years later in 1982 with greater emphasis on recovery rather than reform. This paper reviews the development of RSMCs, describes their operation and appraises the reform underway since 1982. It concludes with some policy suggestions relative to further reform of the RSMC system.