Ecotourism is an instrument for protecting the natural landscape along with improving the livelihood of the rural communities. It helps minimise the negative impacts of tourism on bio-diversity of the protected areas .With the increasing prospects of better infrastructure and improved means of communication under the framework of China-Pakistan Economic Corridor (CPEC), there is huge potential for promoting ecotourism in the ecologically fragile areas like Gilgit-Baltistan (GB). This paper attempts to evaluate the theoretical concept of ecotourism and sustainable development and also analyses how the two issues are intertwined. Furthermore, it explores the prospects for developing ecotourism in GB with the help of a better infrastructure development as planned under the CPEC. While doing so, this study examines the potential benefits of ecotourism for sustainable development of the rural communities of GB.