Desertification directly threatens more than 250 million people and one third of the earth's land surface. Although it is well known that desertification could be reversed in most cases if the intensity of land use were reduced, there have been no studies on how to achieve this reversed desertification on a large scale. We conducted a case study in Hunshandak Sandland of North China, exploring how creation of a nature reserve might aid restoration of a degraded ecosystem. Experimental data indicated that desertified regions, if designated as a nature reserve, could be restored with conservation of biodiversity. The buffer zones in moderately desertified lands could serve as a base for forage production and/or ecotourism industry. The construction of ecologically designed towns (ecotowns) in transition zones could accommodate migrants moved from core zones so as to develop stock production, related industry, and ecotourism, enabling both economic and environmental development. Up to now, 5778 local inhabitants in the core zones of Zhenglan Banner (county) in the Hunshandak Sandland have been moved out of the severely degraded areas with the financial assistance of the central government. Those people have been moved into three eco-towns of the Banner with an objective of greatly enhancing the economic and social status while restoring the degraded sandlands.