This chapter deals with the issues and challenges of Mediterranean tourism destinations related to sustainability. The authors critically evaluate the possibility of sustainable transformation, regeneration and reset of the current global tourism development model. The research is focused on the development of system of sustainability indicators relevant to monitor sustainable transformation of Mediterranean tourism destinations. The conducted pilot research included a review of relevant literature and policy documents related to the tourism strategic framework and preliminary research: interviews with stakeholders in Croatian destinations with the goal to define key sustainability issues and a focus group with experts who discussed possible sustainability indicators models. The preliminary results indicated key sustainability issues and the complexity of the process of measuring sustainable transformation of Mediterranean tourism destinations.