Owing to its water holding capacity, sphagnum has been used by people for hundreds of years. Currently it is being harvested commercially on the West Coast of the South Island, New Zealand. It is largely to supply Japanese horticultural companies. Resource extraction has increased rapidly in recent years and much basic information regarding the resource, the industry and the implications of use has been entirely lacking previous to this study. Resource characteristics are described in terms of sphagnum ecology. Sphagnum is adapted to life in wet, nutrient poor, peat producing ecosystems. Five species of sphagnum are recorded from the West Coast; the harvested species, S. cristatum, is most common. Sphagnum mires do not provide habitat for many species of plant or animal but some rare and uncommon species are present. The history of sphagnum use is outlined and current use and the West Coast industry described. The industry has increased in size rapidly since late 1979; numerous individuals and several large companies are currently involved. High net revenues are available to companies and individuals in the industry which is small with few people employed full time; it is restricted in size by market constraints. Sustainable yield harvesting is achievable; yields may be increased through intensive management or cultivation. Much of the sphagnum resource is on state owned land and is managed by the Department of Lands and Surveyor New Zealand Forest Service. Various management procedures are used, some of which have not been satisfactory. Sphagnum harvesting is compared as a land use with farming and forestry on similar land. From a national economics stance it has higher net benefits per hectare than the other options. The sphagnum industry is sustainable in its present form although the market is sensitive to product quality. Sphagnum harvesting affects adversely the mire ecosystem, displacing some components and reducing the overall environmental quality; these impacts are less than those of the other land use options. It is more labour intensive than sheep and beef cattle farming; numbers employed per hectare are similar to dairy cattle farming and forestry after forest maturity. Sphagnum harvesting has potential as a long term land use and is appropriate for land supporting substantial amounts of sphagnum. Management options are discussed with reference to various objectives. It is recommended that policies enabling sphagnum harvesters to have exclusive rights over areas for extended periods be designed and that reserves are established to preserve sphagnum mires and the various component species.