Construction and development of the infrastructure needed pave the way for development. Dams can manage water sources and the environment, and are therefore one of the most important infrastructures needed for development. Dams provide a high capacity for tourism development. Karun-3 Dam, Izeh, is one of the biggest arch dams in the Middle East which can play in important role in rural tourism development due to its geographical location and ecotourism attractions. The purpose of the research was to study the role of this dam in tourism development in upstream villages. The research method was descriptive-analytical based on field study and using questionnaires as the research tool. The sample included 330 persons living in three upstream villages. The results showed that Karun-3 Dam has had a role in improving tourism economy indices in upstream villages (p < 0.05). The mean of indices was 3.56, which clearly confirms the positive role. The results indicate that dams develop service jobs and handicrafts, increase revenue and job opportunities, improve construction, increase the value of lands, and encourage investment. The results of Wilcoxon Test (p < 0.05) indicates the role of dams in improving tourism facilities in upstream villages. The mean of the test was 2.09 before the construction of the dam and 3.67 after it, which clearly shows the improvement of tourism facilities after the construction of the dam. Furthermore, the results of Wilcoxon Test indicate the role of dams in attracting local tourists from adjacent cities and provinces. From among the three villages investigated, Large Sheyvand Village had a significant difference from the perspective of tourism development, indicating the significant role of the distance between the villages and the dam.