As a small island in the Mediterranean Sea, Cyprus must develop a sustainable tourism model. Although the ongoing political problems in Cyprus provide additional challenges, the number and activities of women ecotourism entrepreneurs demonstrated an inspiring growth over the last decade in the northern part of Cyprus. The well-being and flourishing of these women entrepreneurs influence their participation and further involvement in the sector. Psychological empowerment plays a significant role in achieving a flourishing society, and our results reveal that ecotourism can be used to create positive change in women’s lives. We study how the mindsets and flourishing levels of these ecotourism entrepreneurs are related and how empowerment can change the direction of this relationship. Our research model was developed based on the self-Determination theory. Surveys were distributed to 200 women ecotourism entrepreneurs in rural areas of Northern Cyprus. We demonstrate that women who have growth mindsets, i.e., those that believe people’s characteristics such as abilities are not fixed, experience lower levels of flourishing, perhaps contrary to what some might expect. This result may be due to the presence of gender inequality and may be an outcome of living in a region where a frozen conflict places additional external constraints on women entrepreneurs. However, as we predict, psychological empowerment changes the direction of this relationship. When psychological empowerment is high, women with a higher level of growth mindset experience a greater level of flourishing, even in an unfavorable context. This is the first study which analyzes women ecotourism entrepreneurs in Northern Cyprus. Moreover, this is the first study that focuses on the relationship between growth mindset, flourishing and psychological empowerment. The results can be used by governmental and non-governmental organizations as a source in their decision-making processes while managing and coordinating microfinance opportunities for rural development to support women’s empowerment and well-being.