Abstract: The limited explanatory research on residents' perceptions of tourism impacts has resulted in an underdeveloped theoretical orientation of research on this subject. This paper presents a social exchange process model as a theoretical basis for some understanding of why residents perceive tourism impacts pOsitively or negatively. The model is based upon the concept of the exchange relation. Propositions are derived from the model to test the relationships between the model's components. These propositions have been developed from inferences based upon the social exchange literature. Keywords: tourism impacts, residents' perceptions, social exchange, exchange process.