Abstract: Rural domestic sewage treatment is a basic need for implementation of rural revitalization strategy and an important component of living environment improvement. This paper summarizes the rural situation and rural domestic sewage treatment status in Yunnan. Linking to national policies and local characteristics,the problems and challenges that rural sewage treatment in Yunnan is facing were analyzed as well. It provided a theoretical support to rural sewage treatment in Yunnan. The results indicated that 80% villages were populated below 400,thus these villages should adapt decentralized treatment approaches; about 80% of natural villages are distributed in mountainous and semi-mountainous areas that belong to non-sensitive areas and have large environmental capacity. Therefore,rural domestic sewage treatment needs to be pushed forward in coordination with rural toilet improvement,which optimizes resource utilization; currently only 6. 8% of the natural villages in Yunnan are covered with sewage treatment facilities,the rural domestic sewage treatment task is arduous; the existing problems and challenges include large base figure,weak foundation,technical deviation from reality, " heavy physical construction and weak management",over-dependence on governmental financing and so on.