Research on sustainable tourism development in the context of islands has mainly focused on warm-water destinations. Because the concept of sustainability differs according to the type of the destination, this case study increases the understanding of sustainable tourism development in a cold-water destination. The Finnish archipelago was chosen as a case destination, since sustainability has become an important policy framework for the tourism industry in Finland. The findings show that economic sustainability is the most important and socio-cultural sustainability the most contradictory as well as the weakest sustainability dimension. In particular, the conflicts caused by the pivotal role of the municipality, the specifics in legislation, the Finns’ emotional and personal relationship with nature and second home ownership emerge as the context-specific features in sustainable tourism development. These findings have important practical implications for the destination stakeholders when converting the intentions related to sustainable tourism development into practice.