This dissertation studies the bioeconomics and management of an invasive species. It uses gypsy moth as an example to examine the optimal control of invasive species. This dissertation is composed of five chapters. Chapter one provides an overview of the current bioeconomic research and the main questions I want to address in this dissertation. I would like to integrate economic analysis and biological analysis in this dissertation to provide a framework for bioeconomic research. I also want to study the spatial nature of the biological invasion process and design spatial policies to target invasive species. Computational methods are applied to solve resource management problems. Chapter two reviews the history of the gypsy moth invasion and briefly describes the biology of the gypsy moth. Chapter three uses a contingent valuation method to determine the willingness to pay to avoid different defoliation levels. A quadratic damage function is estimated from responses to the willingness to pay survey. Chapter four develops a bioeconomic model to study the optimal threshold policy for controlling an established gypsy moth population. Chapter five uses a diffusion model to study the gypsy moth diffusion process and evaluate the effectiveness of associated policies.