This paper presents a detailed case study of the tribal community of Kattunayakan Theru, a rural village in Ramanathapuram district, Tamil Nadu, as a Live-in-Labs® program for rural development and sustainable capacity building. The village faces major social and economic challenges, including lack of livelihood opportunities, lack of education, and poor infrastructure. Through Participatory Rural Assessment (PRA) and Human-Centered Design (HCD) methodologies, key issues such as water scarcity, poor sanitation, and high dropout rates especially limited income, thereby perpetuating a cycle of poverty in the community. To address these challenges, this study proposes a comprehensive solution focused on empowering rural women through skill development in tailoring, which has been identified as a sustainable livelihood opportunity appropriate to cultural intelligence. Combining skills development, educational outreach, and entrepreneurship, the project aims to provide a sustainable model of rural sustainable development that can be replicated in other areas facing similar challenges quite. The study highlights the importance of community empowerment through participatory approaches, ensuring that solutions are locally driven and sustainable in the long term.