Farmer cooperatives in Northwest China first appeared in the 1920s. Their development has been strongly influenced by the external environment and political approaches to cooperative promotion. Although farmer cooperatives have developed rapidly in China in the last three years, progress has not been uniform across the provinces, due to differences in farmer education levels and varying economic and social situations. In order to identify factors for the successful development of farmer cooperatives in Northwest China, two cases of provincially approved successful farmer cooperatives in Shandan county of Gansu province were chosen for this research. The results revealed that a stable legal environment; a dedicated initiator and leader; government financial and technical support; farmer understanding and participation of cooperative activities and appropriate external support from professional NGOs were the key factors for the successful development of farmer cooperatives in Northwest of China. This study also found some challenges that farmer cooperatives have faced in their development. The successful development of the cooperatives studied showed their significant influence on both their members and the local rural community.