ABSTRACT Community-based tourism (CBT) projects often fail to enhance rural livelihoods because of poor fit with the local livelihood context and inequitable participation opportunities. Through a mixed-methods study on a CBT initiative in Carmelita, Guatemala, this research applied the Sustainable Livelihoods Framework (SLF) to understand how tourism contributes to local livelihoods and residents’ perceived barriers for participation. The authors applied ethnographic research methods (observation and semi-structured interviews with 43 Carmelita residents and 10 key informants) and analyzed wages and job distribution from tourism employment records. CBT supported a high, albeit gendered, distribution of tourism jobs across the community. Tourism was a fundamental, but not stand-alone, livelihood activity. Residents perceived few barriers to participate in tourism, but increasing formalization changed how they worked with tourists. Understanding tourism development within the local livelihood context and how CBT initiatives distribute tourism job opportunities is critical to meaningfully generate equitable income-earning opportunities within communities.