Abstract: When Diqing Prefecture, opened its doors to foreign visitors in 1992, tourist agencies and government officials promoted Zhongdian County as the Shangrila of James Hilton’s novel Lost Horizon. In 2001 the city officially changed its name to Shangrila. On a high plateau of over 3200 meters, surrounded by snow covered mountain peaks, inhabited mainly by relatively prosperous, friendly and contented Tibetans, with beautiful monasteries, lakes, forests and summer flowers, the county’s scenery and lifestyle certainly bore a strong resemblance to that in the novel. Living in Shangrila describes the life and environment of the Tibetan people throughout Diqing Prefecture. It also examines their neighbors the Mosuo, a branch of the Naxi nationality, who adopted Tibetan Buddhism as their religion, but are still mainly a matrilineal society, unique to Yunnan, living around Lugu Lake, the most picturesque body of water in the province. The book includes over 200 photographs.