Place identity in tourism studies has received increasing attention, as it is closely linked to community and is essential to cultural tourism. Various factors influence residents’ perceptions of heritage tourism, and residents’ sense of local identity can be reflected in their attitudes towards tourism development. Despite numerous studies on residents’ attitudes towards tourism impacts, few have examined the relationship between local identity and community perceptions concerning industrial heritage. This study examines how local knowledge and understanding of place identity influence perceptions of tourism, applying a case study concerning industrial tourism in São João da Madeira, Portugal. A quantitative questionnaire survey was applied to residents, and a structural equation model verified whether tourism perceptions are based on sense of place identity. Results from 389 residents indicate a significant effect of place identity on attitudes towards positive impacts. Findings highlight the need to understand residents’ perceptions and encourage planning strategies, reinforcing identity.