The idea of green economy is being taken seriously all over the world. For developing countries, the key to developing green economy is to strike a balance between environmental protection and economic development. As the largest developing country, China has been exploring scientific schemes to deal with the relationship between environmental protection and economic development. Developing rural tourism is an important way to transform ecological advantages into economic benefits. However, the role of rural tourism remains controversial. No scholars have yet provided solutions for village-level practices in developing countries from the perspective of endogenous development theory. Taking Yucun, a village in Zhejiang Province as an example, this paper reveals the endogenous way of green economy development at the village level through the method of case study. It is confirmed that the key to transforming rural ecological advantages into economic benefits is to cultivate the village’s endogenous development capacity, including activating local resources, cultivating local identity, stimulating local participation, and building a collaborative network. Only by implementing the endogenous development mode in rural areas cannot only stimulate the positive role of rural tourism and form a virtuous cycle, but also avoid the negative effects of rural tourism previously pointed out by scholars.