Community-based tourism (CBT) has become a potential form of tourism in rural areas around the world and in Vietnam, where local communities are the main subject exploiting tourism resources to create tourism products provided for tourists and, the benefits from tourism activities are equally distributed to them. Based on the unique potential tourism resources, local communities and other stakeholders in Ly Son Island (Ly Son District, Quang Ngai rovince) are actively developing the CBT in association with the orientation of tourism becoming a spearhead economic sector, creating a driving force for the socio-economic development of the district. However, in recent years, the CBT development in Ly Son Island has revealed limitations, inefficiencies, and lack of sustainability in exploiting tourism resources as well as product quality. Although researches on sustainable tourism have been quite popular in the world, specific research on sustainable CBT in islands, especially in ones in Viet am, is rarely mentioned. This study used deep interviews, ethnographic fieldwork, and the assets-based community development (ABCD) method to analyze the potential and status of the CBT development in Ly Son Island, thereby suggesting sustainable development orientations from three angles: economic efficiency, improvement of local community capacity, and environmental sustainability.