Abstract: Based on the fundamental principle of no effect on the present agricultural structure of planting grain crops for food security and cash crops when developing bio-energy industry in China, the authors calculated the bio-ethanol potential yield by using arable marginal land resources, and the regional distribution of energy crops was also analyzed. The results show that: considering the total quantity of arable marginal land resources used for growing energy crops, the gross potential yield of bio-ethanol exceeds 74 million tons in China. If only considering centralized large areas of reserved land with the greatest potential for arable land exploitation, the potential yield of bio-ethanol is about 21.7 million tons, nearly 41.4% of yearly gasoline consumption in 2006. The potential yield of bio-ethanol in different regions of China is enormously different. Xinjiang Region, Gansu Province, Shandong Province, Jiangxi Province and Ningxia Region are the several areas with the largest bio-ethanol potential in China.