The development of a tourism village is an effort to reduce the outflow of profits out of the region, the benefits can be enjoyed by the community, and so, the economic exchange that occurs gives benefits to the development of the community and the region itself. The purposes of this study are: 1) to analyze the influence of the tourism villages developmenton community empowerment in Penglipuran Tourism Village, Bangli Regency; 2) analyze the influence of the tourism villages developmentand community empowerment on community welfare in Penglipuran Tourism Village, Bangli Regency; 3) analyze the role of community empowerment in mediating the influence of the development of tourism villages on the welfare of the community in Penglipuran Tourism Village, Bangli Regency; 4) design a tourism village development strategy in accordance with the conditions of the community in Penglipuran Tourism Village in Bangli Regency. This research was conducted in Penglipuran Tourism Village, Bangli Regency. The number of samples in this study based on the Slovin formula as many as 194 respondents with the sampling method used is nonprobability sampling that is a combination of accidental sampling and snowball sampling. Data collection methods used in this study were observations, structured interviews, in-depth interviews. Data analysis techniques used are descriptive analysis techniques and Structural Equation Modeling (SEM) with alternative PLS (Partial Least Square). The results of this study indicate that the development of a tourism village has a positive and significant effect on community empowerment, the development of a tourism village has a positive and significant effect on community welfare in Penglipuran Tourism Village, community empowerment has no significant effect on community welfare, the indirect effect of the development of a tourism village on community welfare through community empowerment is insignificant and the right strategy direction to be implemented is to organize events to attract tourists, increase and multiply tour packages, and preserve the cultural authenticity of Penglipuran Tourism Village.