Community-based ecotourism (CBE) is a popular research area, which focuses on destination community participation in ecotourism development for livelihood enhancement. Scholarship on this area evidently elucidated CBE as having delivered benefits to the local community in terms of economic, social, and environmental aspects. However, challenges faced by them to ensure their active participation in CBE still persist and are empirically vague in the context of developing countries. This qualitative study gives primacy to the local communities’ voices especially the challenges faced by those who have been engaged in ecotourism scheme for decades in one of the pioneer ecotourism destination in Sabah, Malaysian Borneo. The study discovered that local communities’ challenges in ecotourism development are manifold, thematically categorized into internal and external challenges. The study advised that ecotourism development in Sabah, Malaysia will be in danger, if it fails to emphasize the local community participation and their aspirations, thus weakening the sustainability. The study proposes that stakeholder approach be taken as a remedy to overcome the challenges faced by the local communities in ecotourism in the study site. Finally, the study concludes by highlighting its contribution to the body of knowledge and practical implications based on research findings.