This study aims to examine the influence of Local Leadership Role and Community Participation on Community Economic Improvement either directly or indirectly through Asset Based Community Development in Penglipuran Tourism Village Bali. The quantitative research method was used with 100 residents as a sample selected by purposive sampling. Data analysis using SMART PLS. Based on the results of the study, Local Leadership and Community Participation have a positive and significant effect on Asset Based Community Development in Penglipuran Tourism Village Bali. From the results of the mediation test, it was also found that Local Leadership cannot directly affect Community Economic Improvement but must be through community empowerment programs, namely Asset Based Community Development.  While Community Participation can directly affect Community Economic Improvement and also have an indirect effect through Asset Based Community Development.