Abstract: In Japan, depopulation is a serious problem in rural areas. To survive economically, the depopulated communities focus on tourism development. However, tourism development, even when successful, can have negative impacts, such as bringing intense competition to local businesses and having negative environmental effects. This thesis explores how rural Japanese residents who live in depopulating tourism areas think about and react to the development of tourism in their communities. Investigating residents’ opinions about tourism can help the communities create sustainable future development plans and identify what the community truly wants. Although previous research showed that residents’ engagement is important for successful tourism development, it has not investigated the subjective viewpoint of residents. Thus, this thesis focuses on residents’ subjective views and their opinions about tourism development in their areas. To investigate these views, I conducted formal and informal interviews along with participant observation with residents in the Tsuetate Onsen Hot Springs and the Kurokawa Onsen Hot Springs areas, Japan. I also provided questionnaires to them in the areas. For analysis, I used mixed-methods and the narrative method. My principal finding of this study is that residents’ involvement alone is not enough for successful tourism development. Rather, it is more important to get residents to manage community meetings and organizations effectively. Thus, they reduce the negative impact of poor community organization and bad interpersonal politics so that they can achieve growth in their communities. Negative interpersonal politics can be an important factor because they can stop residents from participating in community work and fostering a sense of communal unity. Tourism development may also help to sustain communities by creating jobs for the youth. However, depopulation is by far the biggest issue for a community when trying to maintain itself as a tourism spot.