Dry valleys are a striking geographic landscape in Hengduan Mountains Region and are characterized by low rainfall, desert type of vegetation and fragile environment. Past efforts and resources have been concentrated mainly on rehabilitation of degraded ecosystem and fragile environment,particularly reforestation, while socio-economic development has been largely overlooked. Despite successes in pocket areas, the overall trend of unsustainability and environmental deterioration are continuing. It is important to understand that uplift of the Tibetan Plateau is the root cause of development of dry valleys, and development and formation of dry valleys is a natural process. Human intervention has played a secondary role in development of dry valleys and degradation of dry valleys though human intervention in many cases has speeded up environmental degradation of the dry valleys. It is important to understand that dry valleys are climatic enclaves and an integrated approach that combines rehabilitation of degraded ecosystems and socio-economic development should be adopted if the overall goal of sustainable development of dry valleys is to be achieved. Promotion of niche-based cash crops, rural energy including hydropower, solar energy, biogas and fuelwood plantation is recommended as the priority activities.