In the last decade, tourism has developed rapidly in the mountainous areas of northwest Yunnan. This growth has led to substantial economic and social changes, with resulting environmental consequences. This article uses a case study to illustrate how local farmers involved in tourism changed their agricultural practices as a result of the transformations that took place in the area. The aim was to examine tourism's expected benefits of poverty alleviation and conservation incentives. Tourism investments were found to have been adopted only by households with available cash and labor, whereas they remained inaccessible for the poor, small landowners who most needed a new source of income and used their land more exhaustively. Relatively rich, large landowners did not take the opportunity to reduce their agricultural activities. Instead, they used supplementary incomes earned from tourism to hire external labor to cultivate their land more intensely. Tourism development failed to generate real incentives for mountain farmers to adopt more conservation measures and prevent soil erosion and nonpoint source agricultural water pollution, which currently constitute serious environmental problems for mountain environments in Yunnan. This article presents recommendations based on the conclusions of the study.