Abstract: Coptis teeta is an economic medicinal plant which is well protected in Yunnan. Based on ethnobotanical theory, combined with field study, community survey, and literature study, we investigated the history of cultivation and traditional management of C. teeta by local Lisu people in the Gaoligong Mountain region, Yunnan. We studied the local people’s knowledge and experiences in cultivating and utilizing this plant and its significance for biodiversity protection. The results showed that, since 130 years ago, in order to sustain this important economic plant, Lisu people have developed a set of effective methods to cultivate, manage and harvest it, and thus have formed a harmonic agroforestry system with higher species diversity than other land-use types. In return, the cultivation of C. teeta has benefited local Lisu people, providing over 50% of their cash income. This kind of land-use provides a good example of effectively protecting ecosystems without ruining local people’s profit.