The sexual behaviour and HIV risks among Chinese MSM in rural areas are grossly under-researched. The aims of this study were to explore the process and formation as well as the factors in an initiation of sexual relationship or act in among MSM in this cultural setting. Twenty-four in-depth interviews and observation were conducted in Dali prefecture in two field visits in 2004 and the data were analysed using grounded theory and an ethnographic decision model. We found their sexual relationship can be understood as a negotiation process with self, family and society, some of which (e.g. emotional and physical needs; rationalization in choosing partners) are common in all MSM groups while others (e.g. sex hierarchy or role of family) are geographically and culturally more unique or prominent for rural China. By better understanding of these decision processes, more effective and target-orientated intervention programmes can be implemented fighting against HIV/AIDS in this sexually marginalized sub-group of the population.