The HIV epidemic is rapidly increasing among men who have sex with men (MSM) in China. Data on the disease burden and risk behaviours of MSM related to HIV transmission are needed to inform education and prevention programs. We conducted two cross-sectional surveys among MSM in Yuxi Prefecture in Yunnan Province, China, during 2010-2011. Men were recruited by snowball (participant referrals) and nomination sampling methods at gay-oriented venues and hotspots. Participants were asked to complete a 20-min anonymous questionnaire. Blood samples were collected to determine HIV status and the BED capture enzyme immunoassay was used to estimate the incidence rate. A total of 288 MSM participated in this study across the two surveys. The two-year overall HIV prevalence was 10.7 % and the estimated incidence rate was 5.4 per 100 person-years (95 % CI 1.1-9.6). A reported 37.2 % of MSM were married to a female and 35.1 % had sex with a female in the past 6 months. Condom use with male partners (81.4-93.0 %) and female partners (56.3-77.4 %) at the last penetrative act significantly increased between the survey conducted in 2010 and the survey in 2011. HIV prevalence is high among Chinese MSM in Yunnan. Common bisexual behaviours and low consistent condom use with female partners suggest a potential spread of HIV from MSM to females.