In many countries, tourism has emerged to become an important economic sector, often replacing traditional industries such as agriculture. This process of change, whereby an economy restructures over time from one economic sector to another as a result of institutional change, has been termed transformation. Transformation as a result of tourism activity has been observed and studied within the literature, but the body of work is not well synthesized and there are definitional issues. In particular, few researchers have addressed the process of tourism transformation, specifically the dynamic interaction between structure and institutions. This lack of research foci has limited the development of long-run decision-making tools available to governments, resulting in difficulties when developing policies for tourism destination development. This article investigates this gap by synthesizing the tourism transformation literature to develop a theoretical framework to support future transformation research in a tourism context. The theoretical framework is based on four dimensions of transformation theory: time, space, structure, and institutions.