This study investigates the role of social entrepreneurship in fostering sustainable urban tourism development, focusing on the city of Mashhad, Iran. As one of the most significant pilgrimage and cultural destinations in the Middle East, Mashhad faces both opportunities and challenges in integrating social entrepreneurship into its tourism sector. The research emphasizes that tourism, when guided by principles of sustainability, justice, altruism, and community participation, can create profound socio-economic and cultural benefits. However, it also identifies the structural weaknesses and management issues that currently hinder the full realization of these opportunities. Methodologically, the research is applied in purpose, descriptive-analytical in nature, and survey-based in design. The statistical population included residents of Mashhad during the period from December 2023 to June 2024, reflecting a comprehensive timeframe that captures diverse seasonal dynamics of tourism in the city. Data were collected through a combination of documentary sources and field surveys using a structured questionnaire. Based on Cochran’s formula, 384 valid responses were obtained after eliminating incomplete cases, ensuring representativeness and reliability of the data. Reliability was confirmed through Cronbach’s alpha, with most variables surpassing the acceptable threshold of 0.7, ensuring robust internal consistency, except for social education, which showed slightly weaker reliability but remained within an acceptable range for exploratory research. Data analysis was conducted using SPSS and SmartPLS software, applying both descriptive and inferential statistical methods. The analytical results fully support the main hypothesis that social entrepreneurship positively affects sustainable tourism development. All sub-hypotheses confirm significant relationships between sustainable tourism and social trust, altruism, innovative behaviors, enhanced security, social education, employment and empowerment, as well as social dynamism with value creation.