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Within the new array of ‘green’ products and services, ecotourism claims to combine environmental responsibility with the generation of local economic benefits that will have both a development impact and serve as conservation incentives. Economic incentives are imperative for nature conservation, particularly in remote and ill-monitored regions where a weak state presence hinders the use of alternative tools of environmental regulation. In the following, the link between tourism, local benefits and conservation is conceptualised and analysed empirically, using data from the Cuyabeno Wildlife Reserve in the Ecuadorian Amazon region, near the border of Colombia and Peru. Three Cuyabeno indigenous groups have developed different modes of tourism participation, ranging from autonomous operations to pure salary employment. A quantification of local cash flows from tourism allows for a comparative analysis of income structure, spending, and the impacts on local development and on conservation attitudes. It is concluded that in the whole study area, tourism has actually provided significant additional income. Counter to common belief, the mode of participation is less decisive for local income generation than the tourist attraction of the natural site, the degree of tourism specialisation and the level of local organisation. However, as a conservation incentive, the effectiveness of tourism income depends on the incentive structure inherent in the mode participation, and on the substitution versus complementary of other productive activities: only if tourism changes labour and land allocation decisions, will it have a local conservation impact. It is discussed under which circumstances the conjectured link between tourism, local incomes and conservation is likely to be effective. This leads to some general lessons for government policies, for the design of integrated conservation and development projects, and to a number of site-specific recommendations for improving incentive structures.