(FORTUNE Magazine) – Steve Morgan has an acre of swampland he'd like to sell you. You'll have to stop by his office, located in a strip mall outside Sacramento next to a store called Wigs R U, and you'd better bring around $250,000.

Morgan is the CEO of Wildlands Inc. and one of a growing number of "mitigation bankers," or ecologically oriented land dealers. In one particularly successful deal, he bought an island outside Antioch, Calif., a few years ago and transformed a fallow hay farm into a nirvana for endangered delta smelt and steelhead trout by digging five miles of meandering channels and replanting willows and sycamores. The project cost $2 million, and Morgan has already earned $9 million from selling the property rights.

Who exactly is in the market for expensive, undevelopable land? Builders, who in accordance with the Clean Water and Endangered Species Acts of the early '70s must "mitigate" harm to wetlands and other habitat by creating or restoring similar environments elsewhere. The first "bank" was formed in 1989, and now there are around 300 of them in the U.S., with another 100 awaiting government approval.

So when clients like the U.S. Army Corps of Engineers or Del Webb, the building company, raze wetlands to build dams or retirement complexes, they simply open an account with a land dealer like Morgan and pay from $1,500 to $250,000 for each acre of habitat. Costly as that is, the banks do provide a legal and ethically appealing option for developers. Before mitigation banks, if a builder found protected flora or fauna on a property slated for development, the choice was to mitigate the damage independently, abandon the project, or adopt the motto "Shoot, shovel, and shut up."

Morgan, who has been in business since 1991, says annual revenues have soared to eight-digit figures, and pretax profits are between 20% and 30%. That beats what he previously made owning a Mexican factory that manufactured fishing lures. Still, this kind of banking is a high-risk business, and doing it right means paying dearly for scientific advice. Morgan's 39-member staff includes biologists, botanists, and landscape architects.

Establishing a new bank can also take years of haggling with federal and state bureaucrats. And there are serious questions about whether re-created wetlands can live up to natural ones in terms of offering a suitable habitat for endangered species. "For some types of wetlands, there's just no real way to replace them," says Julie Sibbing of the National Wildlife Federation.

That hasn't stopped financiers from developing a newfound appreciation for the environment. Last summer a group of options traders formed Fox River Conservation Partners, a for-profit venture that aims to buy wilderness at market rates and sell it above them. The Electric Power Research Institute, a think tank, has been counseling big utilities with undevelopable land on discovering their own "eco-assets." Predicts EPRI's Bill Coleman: "One day we'll hear of a private firm establishing a trading account in protected species--wouldn't that be sexy?" More like scary, say some environmentalists. Still, it's hard to ignore the bottom line: When wilderness sells for $250,000 an acre, perhaps developers will think twice before destroying it.

KATHERINE ELLISON is co-author of The New Economy of Nature: The Quest to Make Conservation Profitable, to be published by Island Press on April 22.