Cordyceps chanhua is an important Chinese traditional medicine and food, that has important application value in the development of green functional food and new resource drugs. Taking one wild fungi Chanhua collected from Qujing of Yunnan province as the experimental material, the biological characteristics and artificial cultivation conditions were studied for the purpose of domestication and cultivation. Based on the morphological anatomy and molecular phylogenetic analysis, a wild ascomycetes was identified as C. chanhua. The biological characteristics and domestication of C. chanhua strain were studied by single factor experiments and orthogonal tests. The result showed that the branch stalk of C. chanhua was orange yellow or yellow white, (8.0-28.0) mm×(1.5-3.0) mm, and the conidia was oblong, (4.0-8.5)µm×(1.5-3.5)µm. The optimum temperature for the mycelial growth was 24 ℃, the optimum pH value was 6, the carbon source, nitrogen source and mineral salt was sucrose, yeast powder and magnesium sulfate respectively. The results of orthogonal test based on three factors under the optimum pH value and temperature showed that carbon source had the greatest impact on the mycelial growth, followed by nitrogen source and mineral salt, with range 1.21, 0.39 and 0.13 respectively. Therefore, the optimal combination of factors for the mycelial growth of C. chanhua was sucrose 20 g/L, yeast powder 2 g/L and magnesium sulfate 2 g/L. The artificial cultivation of C. chanhua utilized the 1∶1 mixed medium of wheat and rice, and the harvest cycle of fruiting body was about 40-45 days, and the average dry weight of each cultivated Chanhua was about 9.56 g. The external morphological characteristics of artificially harvested C. chanhua were significantly different from those of wild fruiting body. The fruiting body was yellowish to light yellow, with few branches, 1.5-5.0 cm in length, 0.3-0.8 cm in width and 0.1-0.2 cm in depth. The sporangium bundles were covered with dirty white flocculent or powdery conidia. The screening of excellent strains and optimal culture conditions of C. chanhua would provide a theoretical basis for its study on the diversity of germplasm resources, protection and utilization.