Tourism development has long been promoted as an effective means of bringing improvements to local communities. However, along with many positive benefits of tourism there are many negative impacts on economic, social and environmental aspects of communities. The introduction of tourism often triggers alterations in the way local people make a living. Such alterations often lead to full tourism-dependent livelihoods, affecting the sustainability of traditional livelihoods due to the unreliability of the tourism industry. This study provides empirical evidence of such alterations in local communities. The research data for this study was collected in Komodo District, West Manggarai, East Nusa Tenggara, Indonesia, with the souvenir, tour boat and travel businesses as case studies. Using qualitative methods, this study elaborates the impacts of tourism on local livelihoods, by focusing on: the process of how tourism affected local livelihoods; the opportunities and threats emerging from the impact of tourism; the strategies applied to respond to the challenges; and the locals’ perspectives of influential stakeholders and sustainable tourism development. Although the current businesses provide the local businesspeople with a relatively immediate income, potential challenges have emerged that threaten the sustainability of their tourism-based livelihoods: their full reliance on tourism; fierce competition; extensive low seasons; and their lack of required skills. The locals’ strategies responding to such challenges remain focused on tourism-dependent businesses that have a high reliance on tourism. If tourism declines, the local people will have insufficient alternatives to maintain their livelihoods. Preserving non-tourismrelated businesses as a livelihood diversification strategy will significantly increase their ability to cope with difficult times.