This chapter examines the decline of tourism in Katherine, one of the Northern Territory's iconic remote destinations. While the decline coincided with severe floods damaging much of the town and its tourism infrastructure in 1998, other factors such as the overall decline of Outback tourism in Australia and changes in key markets such as backpackers and self-drive tourists contributed to the difficulty in reviving Katherine's tourism industry following the floods. Katherine tourism demonstrates characteristics consistent with the Beyond Peripherymodel of tourism development in remote or sparsely populated areas. The chapter argues that Katherine has become even more distant and disconnected from tourist markets, investors and policy makers since the floods. Key issues for future development include an increasingly uneven relationship between Katherine and the capital city of Darwin, and an inability to identify alternative markets and development paths independent of the dominant tourism structures in the Northern Territory. Katherine is an example of a remote destination which initially had substantial competitive advantages because of its location and levels of local investment in tourism, but has since lost those advantages due to a failure to respond to changing market forces. The chapter thus emphasises the fragile nature of tourism in remote locations, and its vulnerability to exogenous shocks and changing government priorities, reminding us of the broader challenges for economic development in remote resource peripheries.