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Abstract This paper investigates the process of tourism-driven urbanization as a local strategy of town development in China. Existing literature has highlighted the role of industrialization in the urbanization process of China's small towns, but here it is suggested that tourism - a development initiative based on the creation of space for consumption, rather than production - can also foster significant expansion of urbanized built environment and remarkable transformation of local socio-economic structures. The case study suggests that, in contrast to the recent process of industrialization-based urbanization in China's small towns, tourism urbanization in Zhapo Town, Guangdong Province has been a highly localized development initiative characterized by the absence of foreign capital investment. Tourism-driven urbanization in Zhapo has involved several processes whose joint effect has reproduced the local socio-spatial organization: the rapid of expansion of urbanized built environment; a unique pattern of land use and land development; the booming of tertiary economic sectors; and the emergence of a flexible regime of labor force. In the meantime, the research also contests Mullins' (1991) classical theorization of tourism urbanization, and suggests that recent tourism-driven urbanization process in Zhapo Town is not the product of the post-modernization of urban cultural manifestations, but is situated within the context-specific space of China's modernity and is based on relatively standardized provision of tourism-related service and the mass consumption of nature. Highlights ► The research investigates town development in China with the perspective of tourism urbanization. ► Tourism in Zhapo town has triggered significant changes in urbanized built environment. ► Tourism urbanization is accompanied with local socio-economic restructuring. ► Tourism urbanization in Zhapo is situated within the space of China's modernization.