Scuba diving is becoming increasingly popular worldwide as a niche experiential tourism industry. The development of diving industries particularly in tropical destinations of LMICs has implications for the environmental sustainability of marine resources and the social sustainability of local culture and livelihood. Literature has been largely limited to South Africa’s shark cage diving industry. This paper will investigate the intersection of the Urak Lawoi indigenous community and diving industry on Koh Lipe, an island in Thailand’s Andaman Sea. The Urak Lawoi were a semi-nomadic fishing community displaced by the erection of Tarutao National Marine Park (TNMP), resulting in forced livelihood changes and disrupted social structures and cultural practices. Despite the Urak Lawoi’s impressive history and skill as divers, they have been majorly excluded from the present diving tourism industry. Among obstacles such as inadequate language skill and stereotypes of laziness and unprofessionalism, the most pervasive barrier to involvement is a perceived loss of individual freedom, likely constructed from a tenuous history with ethnic marginalization and labor exploitation. Further research must be conducted on the destination diving industry and its impacts on local communities to recommend industry policy initiatives to better realize the potential for meaningful employment and decision-making opportunities for local people.