The paper deals with the delicate balance between the economic benefits and the environmental damage of tourism, with special reference to small island jurisdictions. Most economic activities have a negative impact on the environment and very often such environmental damage has undesirable repercussions on the economy. This is especially so in the case of the tourist industry which depends heavily on environmental services. The paper discusses the dependence on tourism of small island jurisdictions and assesses the economic and environmental impacts of tourism in Malta. The paper also suggests pre-emptive and corrective measures for the promotion of sustainable tourism. The paper ends on the optimistic note that tourism itself is sharpening our awareness of the evils of environmental degradation, and that this could be conducive towards the adoption of sustainable tourism policies and measures.