Ecotourism in Kerala, India, has emerged as a significant strategy at the intersection of environmental conservation and socioeconomic development, particularly in its rural areas. This paper examines the dual role of ecotourism in fostering rural self-employment while simultaneously promoting ecological stewardship, arguing that its most transformative potential lies in its capacity to interweave these into a cohesive model for sustainable development. Kerala, renowned for its rich biodiversity encompassing the Western Ghats’ biodiversity hotspots, backwaters and forest ecosystems, faces persistent challenges of rural unemployment, economic disparity and environmental degradation. The traditional model of resource extraction often proves detrimental to both ecosystems and long-term community resilience. In this context, ecotourism presents an alternative pathway by valorizing the intact environment as the primary economic asset. It facilitates rural self-employment by creating a diverse ecosystem of micro-enterprises directly linked to the conservation of local natural and cultural capital. This is evidenced in the proliferation of community-managed homestays, locally-guided nature tours, agro-tourism ventures, traditional culinary experiences and handicraft cooperatives that utilize sustainable materials. These activities not only generate income but also revitalize indigenous knowledge and cultural practices, embedding conservation ethics within economic incentives. Furthermore, the decentralized nature of ecotourism empowers local communities and community-based organizations, fostering participatory governance and ensuring a more equitable distribution of tourism revenues. In conclusion, ecotourism in Kerala demonstrates a promising, though complex, framework for addressing the twin imperatives of conservation and livelihood security offering a replicable model for other biodiverse regions grappling with similar developmental dilemmas.