Socio-cultural effects of tourism on local communities are now a major focus of academic study. Primarily, the concern is with communities in tourist areas who become hosts and the tourists who become their temporary guests. The development of ecotourism in environmentally sensitive areas can have both positive and negative consequences. This paper examines: (1) whether ecotourism is feasible in marine protected areas; (2) the challenges faced by stakeholders inpublic–private partnerships in developing ecotourism; and (3) the needs in ensuring economic sustainability of displaced communities in and around the Tun Mustapha Park, Sabah, Malaysia. This study has employed a mixed method in data collection which includes participatory discussions, semi-structured interviews, and on-site observations and surveys with various respondents — namely, public and private sector stakeholders and local communities. The observed evidence has shown that with adequate planning and support from private sector tourism stakeholders and relevant public agencies, local communities and the natural environment can stand to benefit from ecotourism development in the area.