Implementing appropriate policies is crucial for adapting the agricultural sector to climate change. However, adopting incorrect policies can exacerbate unsustainable development. Hence, this study investigated the unintended consequences of agritourism development policies as a climate change adaptation strategy in the villages of Shahrud, Iran. It demonstrated how such policies have inadvertently heightened farmers’ vulnerability to climate change impacts. Data were collected through 44 semi-structured interviews, which underwent thematic analysis to identify emerging patterns. The study’s findings indicate that the rapid expansion of Agritourism in Iran, aimed at addressing climate change, has failed to achieve its intended goals. Inadequate government support, increased supply, legal gaps, and lack of empowerment were identified as contributing factors leading to unsustainable development and financial losses. Consequently, smallholder farmers were found to harbor negative perceptions of agritourism and expressed dissatisfaction with existing policies. These findings underscore the necessity of comprehensive policies and support systems to facilitate the effective implementation of sustainable agritourism by stakeholders in Iran.