Biomass in the form of crop residues and ﬁrewood is a major energy source for rural households in China. A survey conducted in the provinces of Shanxi, Zhejiang, and Guizhou shows that 37 percent of rural households use bioenergy for heating and cooking and that bioenergy accounts for 18 percent of their total energy consumption. Most of the biomass used for energy is burned in traditional stoves, contributing to indoor air pollution in rural homes. Crop residues also are commonly burned in the ﬁelds, contributing to the high level of outdoor air pollution in China. Our econometric analysis of the key determinants of bioenergy use shows that bioenergy consumption falls modestly with income growth, increased time required for biomass collection, and less farmland. Hence, open burning of some biomass is an optimal choice and is likely to become more of a problem without policy intervention. These ﬁndings suggest that a more sustainable use of biomass requires policies that promote cleaner, more efﬁcient bioenergy combustion technologies and increase the economic value of biomass such that local households can beneﬁt from biomass collection.