<p>Despite the rapid expansion of cross-border tourism, the sustainability of this growth remains uncertain. Moreover, the extent of cross-border tourism and its contribution to sustainable transformation largely depend on the governance quality. So, this study explores the moderating influence of high, low, and composite governance on the association between cross-border tourism and sustainable transformation from the perspective of the “Green Silk Road” region. Spanning 2005 to 2022, this study employs two-stage least squares (2-SLS) and a two-step system generalized method of moments (GMM) approach to elucidate the intricate dynamics between these indicators. Governance and sustainable transformation indexes are constructed using Principal Component Analysis (PCA). Moreover, a panel co-integration test was also conducted to examine the presence of long-run relationships among the variables. The findings validate that cross-border tourism positively influences sustainable transformation in Green Silk Road countries. Moreover, composite and high governance positively moderate the influence of cross-border tourism on sustainable transformation, which is consistent with the institutional governance theory. However, low governance is hindering sustainable transformation in Green Silk Road countries, indicating that weak institutional enforcement, fragmented governance systems, and disparities in regulatory capacity are hindering the ability of cross-border tourism to translate into long-term sustainability gains. Moreover, control factors, globalization, socioeconomic conditions, household consumption, urbanization, FinTech, and renewable energy transition play a noteworthy role in sustainable transformation. The outcomes indicate that cross-border tourism and robust governance promote inclusive and sustainable transformation, aligning with SDG8. This study encourages stakeholders, governments, and legislators to improve institutional capacity and cross-border tourism for sustainable transformation to accomplish the sustainable future of Green Silk Road. This study provides a novel hierarchical governance-based perspective on tourism-driven sustainable transformation, integrating multi-dimensional indices and advanced econometric techniques, and offers actionable policy insights for Green Silk Road countries.</p>