The inauguration of the Atal Tunnel in October 2020 altered the tourism environment of Lahaul Valley in Himachal Pradesh, India and allowed year-round accessibility to the region. With this accessibility came a rapid influx of tourists, bringing both advantages and disadvantages to the local population. In ecologically fragile regions with rich cultural traditions like Lahaul, a community perception approach to tourism development is vital to ensure sustainable tourism development.This study examined the local community’s perception of tourism across three core dimensions: economic, socio-cultural, and environmental impacts. The analysis was guided by three hypotheses focusing on the influence of demographic variables—age, gender, education, occupation, and involvement in tourism—on residents’ perceptions. The study also examined the per capita income that tourism generates among the respondent group. This study employed a descriptive research design and a quantitative approach. Primary data was obtained by the use of a structured questionnaire administered to 400 respondents from villages offering tourism-related activities.The study reveals that tourism provides a stable and substantial mid-level income for a majority of local households. However, the most important finding that emerged from this study is the contrast in the nature of residents’ perceptions across the three domains of tourism impact. In terms of economic and socio-cultural impacts, perceptions were mixed, reflecting both optimism and concern. The perceptions also vary according to specific demographic variables tested. In contrast, respondents across all tested demographic variables exhibited a strong and unified level of concern regarding environmental impacts, reflecting the fragility of the Himalayan ecosystem and the urgency for sustainable planning. The overall findings of the study support the need for integrated tourism policies that capitalize on economic potential and cultural strengths while placing environmental sustainability at the core of development strategies.Keywords: Lahaul Valley, Community Perception, Tourism Development, Sustainability, Himachal Pradesh.