Abstract: Over the last 5,000 years serious environmental problems—deforestation, desertification, erosion, and widespread pollution of air, land, and water—have prevailed throughout most of China, brought about by a diverse set of social and political contexts. In this paper I focus on an enduring contradiction associated with the post-1978 reforms, namely accelerated environmental resource degradation in rural areas amid unprecedented national economic growth. Declining entitlements to assets and social capital in China's rural village populations are a crucial aspect of altered state-peasant relations, as these are increasingly mediated by the market during China's transition to a hybrid economy. This has resulted in changing patterns of resource use, impacting both the environment and peasant livelihoods. A brief assessment of China's postrevolutionary environmental policy and management practices provides the context for detailed case studies in Henan Province. These examples highlight the relationship between political-economic changes and environmental policy and management. Contrary to reform rhetoric, rural peasants' embracing of reform policies does not necessarily optimize their welfare or promote sustainable use of resources. The case studies reveal alternative pathways for villages, ones that ought to be brought into the policy debate spotlight.