Rural areas face issues that leads to economic downturns. Nature based tourism is practiced to overcome these issues and improve economic development. The residents in the tourism destinations experience the outcomes of nature-based tourism and rural development. Their perception towards nature-based tourism depends on the outcomes they experience. Recognizing their perceptions aid the smooth operation of nature-based tourism. Moreover, residents’ contribution is impacted by their perception. Three research questions were developed to recognize the residents’ perceptions. The questions were perception of residents, expectations of residents and delivery of those expectations. Social exchange theory was the main theory used and economical, socio cultural and environmental aspects were the main focus. The research was conducted as a quantitative study. 66 responses were collected as the sample from Granö, a rural tourism destination in Northern Sweden. Descriptive statistics were used to analyze data. The results showed that residents perceive and expect nature-based tourism to develop economy, develop socio culture and protect environment. Further residents perceive and expect tourism aids to make people stay, rather than move out from the destination. In addition, the level of expectations was higher than their perception, but the delivery of those expectations was lower than both expectations and perceptions. The findings contribute tourism planners to cater the perceptions and expectations of the residents of a rural destination. Consideration of residents’ perceptions and expectations will make them feel their voices being heard and enhance smooth operation of tourism in the destination.