Rapid growth in tourism has occurred in Yunnan Province since 1979 with several destinations being popular. Mass tourism in Kunming City and the central area of Yunnan is shifting to other areas such as Xishuangbanna in the south and Dali and Lijiang in the northwest because of growing interest in ecotourism, cultural tourism and ethnic tourism. A comparison of characteristics of tourism in different locations is conducted as are both its direct economic effect and indirect roles in social and environmental changes. The efforts of the State Nature Reserve of Xishuangbanna to promote ecotourism have shown positive results in attracting tourists but further steps are still to be taken to better market and manage ecotourism. The ethnic and cultural magnet of Dali and Lijiang provides a strong attraction for tourism growth in these areas. The economics of tourism operation in Yunnan is analysed using results from surveys of tourism enterprises and tourists. Problems and the future direction •of tourism in Yunnan and Xishuangbanna are discussed.