NorthwestChina is one of the areas with the severestsoil erosion and poverty in China. Chinese governmenthas initiated a series of projects and invested large amounts of funds in soil erosion control in the region. Based on the investigation data from 1986 to 2005,sources and uses of the investmentin soil and wa ter conservation (SWC),its impacts on rural industrial structure and poverty alleviation were analyzed. Re sults showed a significantincrease of the investmentin SWC. Chinese governmentinvested more than 5. 5 billion RMB and farmer investmentaccounted for 67 % of the total. The investmentin SWC played an impor tantrole in improvements of ecological environmentand economic conditions. The area of fruittree increased very quickly and the percentage of fruittree increased from 8. 2 % to 20. 1 %. SWC measures greatly im proved regional economic conditions. The total agricultural value from SWC increased 70. 2 billion RMB and the netincome per peasantincreased 1 894. 2 RMB.