Tourism has become one of the world’s largest and fastest growing economic activities. This industry has impact on employment generation, foreign currency earnings, balance of payments, and the economy in general. Karnataka is known for its heritage, wildlife, beaches and scenic landscape all over the world. Tourism industry forms an integral part of the state’s economy. The state has immense potential for attracting domestic as well as foreign tourists all over the world and there are a number of destinations which are untapped and can be developed major tourist destinations. Karnataka is a must visit state in India for all tourist enthusiasts and will not get disappointed. Tourism being one of the state’s one of the major industries has plays an important role for developing the economy. The industry has generated various jobs to a very large number of people and has generated economic activities in the tourism and its related industries such as hotels, travel agency and airlines etc. This paper aims to study to assess and analyze the opportunities, challenges and other related issues of Tourism Industry in Karnataka. The study also identifies the need of a well-balanced and effective policy of the state government towards the sustainable tourism development in Karnataka.