Eight postgraduate students from Beihang University in China are divided into two groups.
The first four have already stepped into the cabin called 'Yuegong-1' (Lunar Palace-1). They will stay there for 60 days, before being replaced by a second group who will stay there for 200 days.
After that, the first group will return to the cabin for the remaining 105 days.
The BLSS is a system where animals, plants and microorganisms co-exist. Water and food can be recycled in the system, creating an Earth-like environment.
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"The latest test is vital to the future of China's Moon and Mars missions and must be relied upon to guarantee the safety and health of our astronauts," said Liu Zhiheng of the Chinese Academy of Sciences.
"Yuegong-1" consists of a major living space and two plant cabins or greenhouses, state-run Xinhua news agency reported.
The major cabin hosts four bed cubicles, a common room, a washroom, a waste-treatment room and an animal-raising room. The system allows four "astronauts" to conduct research while their basic needs are met.
The purpose of the programme is to test the stability of the BLSS when astronauts with different metabolic rates take turns to live in the cabin and when they face sudden situations such as blackouts, said Liu Hong, chief designer of Yuegong-1.