Eco-tourism an integral part of the green economy is experiencing increasing popularity as it focuses on environmental conservation and socio economic development. It is an instigator of change that provides a sustainable development in Odisha such as an alternate source of employment to the local community, generation of environmental awareness amongst local residents as well as visitors, and the conservation and sensible use of natural resources. The objective of the study is to ascertain the impact of ecotourism in protecting the natural resources and enhancing the livelihood of the local community. The researcher has also given insights about Chilika Lagoon, one of the major ecotourism spots in Odisha. The study focuses on how tourism can be a major source of generating employment opportunities, enhancing production, productivity and contributing significantly towards development of the state. The aggregated information is obtained from secondary data collection.