This article examines the production of prestige goods in the Neolithic and early Bronze Age (Erlitou and Erligang Cultures) of China, focusing on procurement of raw material, and on manufacture, redistribution, and consumption of ritual objects made of jade, white pottery, and bronze. During the Neolithic period elite groups in several regions may have been directly involved in jade manufacture, which facilitated the formation of interaction networks based on shared cosmological concepts and aesthetic values. The elite enhanced their personal status by controlling ritual power, which was based on access to prestige goods and esoteric knowledge. During the early Bronze Age ritual vessels made of white pottery and bronze entered the inventory of prestige goods. These new types of ritual objects best facilitated the ancestor-worship ceremony, which was the ideological basis for politically legitimizing the ruling lineages. The process of bronze production and distribution, monopolized by the highest elite in the primary center (core), formed the backbone of the political hierarchy, enabling the development of a centralized political economy. These fundamental political and economic changes taking place in the Erlitou Culture indicate the transition from pre-state to state societies in north China.