In the tourism context the sustainability paradigm can be seen as a key driver for public policy development. Indeed, governments have become extremely canny in making all the right noises without, however, at the same time actually effecting major fundamental policy shifts in the direction of sustainable development. But there is a strong argument in favour of fundamental reforms based on the frequently discussed characteristics of the tourism system and its inherent manifolded shortcomings such as its highly fragmented and little coordinated nature, a lack in information exchange and often unclear responsibilities. These are major obstacles that the machinery of government must address, impediments that demand of the political system a high degree of adaptability and flexibility, combined with an ability to accommodate far-reaching reforms in its own processes and structures. In this context, it is therefore important to discuss the role of government involvement in tourism, since it has major implications for more sustainable outcomes. The paper begins with an overview of government's role in the industry, noting the shifts in policy directions as a response to the changing environment of the tourism system. This is then followed by a more detailed account on the conditions for a successful sustainable tourism policy, focusing in particular on collaboration and coordination, participation, decentralisation and information as well as strategic planning. These policy instruments are seen as crucial to facilitate sustainable tourism development.