The wreckage was strewn over a wide area and civilians collected the parts as souvenirs.
"At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers," said Admiral Davor Domazet-Loso, Croatia's military chief of staff in the Kosovo war.
"We believe the Chinese used those materials to gain an insight into secret stealth technologies … and to reverse-engineer them," Adml Domazet-Loso said.
A senior Serbian military official confirmed that pieces of the wreckage were removed by souvenir collectors, and that some ended up "in the hands of foreign military attaches".
China's multi-role stealth fighter - the Chengdu J-20 - made its inaugural flight on 11 January, revealing dramatic progress in the country's efforts to develop cutting-edge military technologies.
Although the twin-engine J-20 is at least eight or nine years from entering service, it could become a rival to America's top-of-the-line F-22 Raptor, the successor to the Nighthawk and the only stealth fighter currently in service.
China rolled out the J-20 just days before a visit to Beijing by US defence secretary Robert Gates, leading some analysts to speculate that the timing was intended to demonstrate the growing might of China's armed forces.
Parts of the downed F-117 - such as the left wing, the cockpit canopy, ejector seat, pilot's helmet and radio - are exhibited at Belgrade's aviation museum.
"I don't know what happened to the rest of the plane," said Zoran Milicevic, deputy director of the museum.
"The destroyed F-117 topped that wish-list for both the Russians and Chinese," Kusovac said.
Russia's Sukhoi T-50 prototype stealth fighter made its maiden flight last year and is due to enter service in about four years. It is likely that the Russians also gleaned knowledge of stealth technology from the downed Nighthawk.
---------------- "And so the greatest of American triumphs... became a peculiarly joyless victory. We had won the Cold War, but there would be no parades." -- Robert M. Gates, 1996