How did Australian society project an alternative national image through tourism and promote its engagement with Asia in the 1980s? Australia was not a popular tourist destination before the 1980s, because of its geographical isolation from other affluent countries. However, during the 1980s, Australia found an opportunity to promote alternative national images through tourism sponsored by Japanese capital. This process is exemplified by the development of tourism in Cairns, a small village on the periphery which gained recognition as a tourist destination in the 1980s. This paper focuses on a period during which Cairns underwent dramatic changes (the 1980s and the beginning of the 1990s) and investigates: i) The politico-economic circumstances behind the promotion of tourism and attempts to attract tourist developments; ii) Actual social changes in Cairns; and iii) The local people's reactions to tourist developments and the consequences of these developments. The paper concludes that: i) The promotion of tourism was a strategy to attract capital investment to deal with politico-economic problems, rather than a tactic to change Australia's national image. The Japanese bubble economy enabled the people of Cairns to avoid their own economic crisis, in spite of a lack of strategic promotional policies and activities; ii) The citizens of Cairns sought to control development projects. The establishment of resorts lacking in any "Australian" characteristics by Japanese investors aroused ill-feeling from the local citizens. The Australian government could not restrict Japanese investment in the tourism industry, however. Daikyo, a major investor in Cairns, invested in tourism-related facilities (e.g. hotels and golf courses) as well as in the public domain (e.g. housing developments and the improvement of the port facility). Although Daikyo's activities changed the landscape of Cairns, the company did not face strong opposition, because it pacified government officials and residents by means of donations and other benefits. By contrast, the mayor and other citizens of Cairns opposed Toko House due to its failure to gain the approval of citizens for its projects; iii) The tourism industry was once referred to as 'a panacea for economic growth'. Cairns developed its tourism industry without specific strategic initiatives. The industry is now declining, however. Not only has the number of Japanese tourists declined dramatically, but Japanese capital is no longer investing in Cairns. Cairns is now experiencing great difficulty in attempting to maintain its status as one of Australia's most-visited tourist destinations.