Tourism has long been viewed as a sector capable of improving people's economic welfare. Many experts however argue that tourism does not always guarantee a higher income for the communities as on several occasions while designing a tourism development blueprint, “community participation” has received little attention. In this context, one type of tourism, which is directly related to “community participation”, is Community-Based Tourism (CBT). CBT is increasingly gaining popularity in developing nations; as it is theorized that, such a tourism approach can strengthen the local economies, empower the local communities, optimize linkages, limit leakages, promote destinations, as well as, can provide a higher quality of visitor experience at tourist destinations. Though CBT projects have benefited many underserved communities in many regions, a good number of CBT efforts have also failed to produce the positive effects and therefore, cannot claim success. Hence, the basic concepts, and various aspects of CBT, and its challenges must be thoroughly understood. This paper focuses on this very aspect. This study is a conceptual research. It takes a qualitative approach to explain the concept of CBT, its benefits, and the challenges that make CBT endeavors less impactful at many places. The data for this study is collected from both primary and secondary sources. This paper will raise awareness of Community Based Tourism (CBT) that may help the communities, as well as, the tourism planners and policy-makers to successfully implement the CBT projects/initiatives; so that it can be a sustainable solution for a better community life and the same time, ensure visitor-satisfaction at the tourist destinations.