The Gusii soapstone industry is one of the oldest traditional craft industry in Kenya. The history of the industry dates back to hundreds and perhaps thousands of years ago (Ongesa, 2011). Initially made as traditional handicraft products for local use, the soapstone products have been transformed into tourist items that are sold to both domestic and international tourists who visit Kenya and are sold in handcraft shops all over the world. The aim of this paper is twofold: first, to provide an historical analysis on the transformation of these soapstone products from items that had mainly utility value to handicraft attractions that are sold to tourists; second, to examine the role of the industry in promoting sustainable livelihood among the people of Tabaka area of Kisii county. Data for this paper was acquired through in-depth conversational interview schedules with selected soapstone producers and sellers, structured conversation with key informants and field observations. The research also provides recommendations that can guide policy formation for the sustainable development of the soapstone industry in Kenya.