We investigated management of wildlife, habitat and the hunting programme in Aksai County, Gansu Province, People's Republic of China, during 1997–2000. Argali Ovis ammon is the focal species both for conservation and hunting. The hunting programme is intended to produce incentives to conserve wildlife and habitat. Poaching, a serious concern throughout western China, has been reduced in recent years in Aksai. Wildlife population trends are unknown because standardized surveys were begun only in 2000. Threats to argali in Aksai include livestock grazing, placer gold mining, and development of a dam, reservoir and aqueduct. The number of hunters participating in the programme (c. 3 per year) could provide considerable funding (c. $60,000 per year), but the allocation of these funds within China has provided too little for conservation at the local level, thus undermining the intended incentive system. Because local wildlife protection officials have been denied both funding and authority to deal with threats to the wildlife, the programme's contribution to conservation has been minor. We recommend that hunters pay fees directly to county-level staff, thus increasing the proportion of funds retained at county-level, and that this added income is used to obtain wildlife grazing rights on important seasonal habitats for argali. These changes would promote local wildlife conservation without the need for additional external funding.