The Sikkim Himalaya is an area of high biodiversity and cultural heterogeneity with distinctive ethnic groups, mountain peaks, sacred lakes, and monasteries, making it a place of tourist attraction. The annual influx of visitors into Sikkim has increased by about 155% over a span of 5 years (1988-1994). Trekking, nature and recreational tourism are growing very rapidly in the Sikkim Himalaya. The socioeconomic conditions for people involved in the tourism business have also improved. The State has a rich tradition of nature conservation. However, local needs and increased tourist activities are causing some environmental degradation to this unspoilt region. Based on three of the most commonly used tourist destinations, the perception of local stakeholders and their attitudes, and discussions with authorities, this paper analyzes the dynamics of tourism growth and biodiversity and its impact on resources, environment, local communities and the state economy. Tourism in Sikkim is growing and is expected to reach ca. 400 000 tourists per year by the end of this century. There is a vast scope for increased tourism in Sikkim that must be viewed with response to environment preservation, and local communities must be involved with such programs. This paper illustrates how tourism activities may be implemented and managed sustainably so that vegetation and culture are protected, and tourist benefits can reach the local community.