The Indonesian constitution has mandated the government to improve the welfare of communities and to maintain cultural identity. Realising the importance of the mandate, different levels of government have adopted sustainability and/or sustainable development in formulating tourism policies and planning. I bring together the theories of postcolonialism and sustainability to examine the conduct of cultural heritage tourism primarily to investigate whether policies of the government have achieved sustainable principles. This research was carried out in Indonesia, a country that has been utilising cultural heritage as tourism attraction. Fieldwork was done in five areas (Makassar, Gowa, Bone, North Toraja and Toraja land) in South Sulawesi that represent the cultural heritage of Bugis, Makassar and Toraja from August 2011 to January 2012. A total of 238 respondents were involved in this study with various methods including 75 interviews (individual and focus group) with government officials, tourism practitioners, local and indigenous communities, people from educational institutions and tourists as well as a questionnaire survey in which 163 respondents participated. A qualitative approach has predominantly guided this research but I also utilised quantitative method (mixed methods) to explore a social and cultural phenomenon from a critical perspective. I concerned with the importance of improving the economic prosperity of local and indigenous people as well as encouraging them to preserve cultural identity through cultural heritage tourism. To some extent, cultural heritage tourism provides advantages for those who work in hotels, restaurants as well as for people who work as guides and souvenir sellers. Thus, cultural heritage tourism can be an alternative to preserve cultural heritage and to improve the economic well-being of communities. But in many cases, inequitable benefits of tourism and the poor condition of cultural heritage as well as the low quality of its management indicate that sustainable principles have not been achieved. The reality in the field shows that challenges constrain the implementation of sustainability which are reflected in socio-economic conditions of the communities and political issues. This thesis addresses issues related to these challenges including cultural degradation, tensions between levels of government and the economic problem of communities. This thesis offers an understanding of the importance of cultural heritage as an opportunity for sustainable tourism development. Empowering communities, strengthening regulation and its implementation, prioritising local and indigenous communities in any cultural and tourism programs, strengthening synergy and coordination among levels of government, educating and training local people and implementing political will and trustworthiness by the government are essential to achieve the goals of sustainable development. Communities should not only rely on the government as the main actor in preservation of cultural heritage and in tourism development. Rather, collaboration between stakeholders should be strengthened. Analytical exploration of economic welfare, cultural heritage preservation and issues embedded in them provides a more critical understanding about cultural tourism in particular and tourism studies in general.