Abstract: Deforestation and forest degradation have become serious environmental issues faced by Sri Lanka. Forest management system of Sri Lanka has been based on ‘command and control’ approach, which shows a limited involvement of local communities as stakeholders in forest management. It is vital that the society sees the economic benefits of forest conservation, in order to conservation being more meaningful and long lasting. Forest-based ecotourism, a non-consumptive, market-based approach to forest utilization has received a foremost position, due to its prospective economic and environmental benefits. Through a comprehensive qualitative assessment, the study finds the key constraints and challenges in adopting ecotourism for sustainable forest management as, lack of awareness and understanding on the concept, inadequate coordination, non-compliance to principles and poor interpretation services. It highlights the need for establishing well-coordinated mechanism, assigning clear roles for relevant stakeholders, enhancing private sector participation and establishment of a certification program of ecotourism businesses.