Local knowledge performs a unique function in emphasizing the locality, originality, and mythology of a destination, but its tourist perceived value entailed further exploration. Through a constructivist grounded theory approach, this study utilize Guilin of China as a case to probe into the tourist perceived value of local knowledge. 22 respondents were solicited for their local knowledge tourism experience and perception while related secondary data extracted from major Chinese online travel agencies. The thematic analysis has identified 19 concepts and 5 dimensions of the tourism perceived values of local knowledge, including the Function Value (FV), Emotional Value (EV), Social Value (SV), Cognition Value (CV) and Self-actualization Value (SAV). Based on this a scale with 19 items has been developed and tested following the rigorous procedure. The study expands the research context of perceived value in tourism and provides a theoretical insights on product development for local knowledge tourism.