Ecotourism is increasingly being promoted as an instrument that helps local socio-economic development and generate revenues to strengthen conservation of critically endangered biodiversity. It is often posited the magic bullet particularly across protected areas in the Global South. In theory, ecotourism can provide economic benefits to economically weaker communities living around protected areas and inspire them to protect the biodiversity in their own interest. This paper, however, provides empirical evidence that the so-called win–win is not an unqualified truism. With a case study on Sundarban Biosphere Reserve, world’s largest mangrove biodiversity and home of highly endangered Royal Bengal Tiger, this article examines complexities involved in ecotourism and urges the need to make it context-specific. It assesses ecotourism’s ability to provide livelihood alternatives to local communities and how can it help in conservation. The findings demonstrate an unequal, uneven, and skewed accumulation of benefits of ecotourism, often associated with market mechanisms of global environmental protection. As little as 36% of the interviewees claimed receiving direct or indirect benefits from ecotourism, the study finds. It failed to offer any benefits at all to the poorest and most marginal communities. On the contrary, it offered disproportionately larger returns to the remotely located capital invested in the local ecotourism facilities in the Sundarbans, thus defeating the principle behind the mechanism. In the area of conservation, tourism was blamed for increasing pollution and harming the health of the ecosystem by tourists who were considered ‘outsiders’ and insensitive to the ecology by the locals and conservation agencies alike.