Mountains are now thought to be second only to beach locations as the most popular tourist destinations. However, the popularity of mountains as a tourist destination comes at a potential cost to the mountain environment. Nowhere is this more so than in the Himalayas, which as home to the world's highest mountains, have been the focus of much attention in the academic press. Some articles have suggested that the Himalayas were being damaged beyond recovery as a result of unsustainable human activity, while the more pragmatic view is that the extent of the problem is exaggerated. While experience in Nepal has shown that tourism does damage the environment, it can also be an invaluable means of development and environmental conservation. To achieve this, a holistic approach to tourism and environmental management is needed that takes account of the needs of the local community, tourists and the environment. By examining tourism development and environmental management in Sagarmatha National Park and the Annapurna Conservation Area Project, using secondary data sources, a number of issues were derived that form essential elements to this holistic approach. These issues formed the terms of reference for the primary research, which looked at tourism in Upper Mustang. A series of in-depth interviews were conducted with people involved in development and environmental conservation in Upper Mustang. Using the terms of reference as the outline for each interview, an assessment was made of their importance to sustainable tourism development and environmental conservation in Upper Mustang. It was found that in the case of Upper Mustang, each of the issues considered forms an essential link towards the goal of achieving environmentally sensitive development. The primary research results in this report therefore correspond to previous experience of tourism and environmental management in Nepal and elsewhere.