Tourism has been a focus of diversification for a considerable period of time and widely promoted as a supporting alternative for local economy in response to increasing agriculture values in rural areas. Rural tourism is likely to become a powerful force of change in the economy restructuring in Viet Nam. Research on diversification into tourism development and the significant roles of the local involvement and its community participation in rural tourism development in Central Viet Nam, a developing country, should be fully explored and assessed. This paper describes the diversification and development of this form of rural community-based tourism on the outskirts of Danang city, Hoa Vang rural district, based on 26 informants, highlighting the nature of the rural diversification, the background of rural community’s participation/involvement in tourism diversification. In identifying this the paper contributes to a literature on how rural tourism products evolve in developing countries, for not only deeply understand and firmly grasp government’ policies in building new-style rural areas, promoting rural residents' involvement, diversifying resources sustainably for new rural construction associated with agricultural structuring but in retaining rurally cultural patterns of life and raising awareness of the commercial and social values of traditions. Keywords: Rural tourism, diversification, community participation, sustainable development, Vietnam