Ko Tao was named by its first settlers for the island's turtle-like geographic shape. Coincidentally, the island is an important breeding ground for Hawksbill turtles and Green turtles. Development of tourism has negatively impacted the health of these grounds but a breeding program organised in 2004 by the Royal Thai Navy and KT-DOC, a coalition of local scuba diving centres has reintroduced hundreds of juvenile turtles to the island's ecosystem.

The island is well known for scuba diving and snorkeling, and also offers some hiking. The most popular place for tourists is Sairee on the West coast, which has a white sandy beach of 1.7 km interrupted only by a few huge boulders and a scattering of medium budget resorts and restaurants. Chalok Baan Khao, to the south of the island is becoming increasingly popular as an alternative for those wishing to escape the crowds. A multitude of beautiful granite boulders, which nestle both in the forests and on the beaches of Ko Tao, attract a growing number of climbers who visit each year to enjoy the adventurous aspect of their sport.

Ko Tao is increasingly becoming a mecca for game fishermen on a budget. Species targeted include marlin, sailfish, king mackerel, cobia, baracuda, trevally and snapper.

Diving conditions have improved dramatically in the past few years with the continuing education of locals by the dive community. The El Nino weather pattern of 1997 caused a warming of the waters which resulted in the loss of a great deal of the shallow corals near the island. Since then, the recovery has been swift and dramatic.