Coptis teeta (Ranunculaceae), is a nontimber forest product (NTFP) that only grows in northwest Yunnan and northeast India. Its tenuous rhizome, known as “Yunnan goldthread” in the traditional Chinese medicine system, has been used as an antibacterial and as an anti-inflammatory medicine for a long time. The increasing demand has resulted in commercial harvesting pressure on wild populations that were already dwindling as a result of deforestation, and wild populations are at risk of extinction. Fortunately, there exists at least 2000 hectares of a C. teeta–based agroforestry system initiated by the Lisu people in Nujiang, northwest Yunnan. This cultivation supplies us with a valuable study case for the balance between conservation and sustainable use. This case study investigated the traditional management system and history of C. teeta in Nujiang through ethnobotanical methods and field investigation. We also contrasted initial costs, economic returns, and labor demands for C. teeta cultivation with other major land uses in the region. Compared with swidden agriculture, the major land-use type in the region, C. teeta cultivation offers high economic returns and low labor and initial costs; moreover, C. teeta cultivation does not interfere with subsistence agricultural duties. This agroforestry system reflected that the cultivation of NTFPs is a conservation strategy for maintaining forest diversity, while providing a stable economic return to local forest communities, and indicates how local people manage biodiversity effectively.