The Cooperative Medical System (CMS) in China is an established medical system that serves the rural areas and provides treatment and prevention of disease, immunization, family planning, and maternal and child health care services. Past experience suggests that the CMS benefited the peasants in rural China. During the 1980s, following reform of China's economic system, the CMS underwent major changes. In some places, CMS stations evolved into various other types of medical and health care systems; in other places, CMS stations ceased operation altogether. This article attempts to analyze the causes and meaning of these changes, and examines the conditions for continuation of this system.