This study advances the bidirectional relationship between residents’ perceived tourism impacts and subjective wellbeing, as well as examines the consequential effects on support for tourism development. The bottom-up formative and top-down reflective structural models were proposed based on the bottom-up and top-down theories of subjective wellbeing and Social Exchange Theory. The models were empirically tested with a sample of 466 residents in Macao. Partial least squares structural equation modelling was employed in data analysis. Results reveal the co-existence of the bottom-up and top-down effects, and also confirm the significant positive impacts of tourism benefits and wellbeing on attitudes toward tourism. Findings suggest the interplay of tourism impacts and wellbeing in forming a virtuous loop, thereby driving support for tourism through mutual enhancing effects. This study validates the bidirectionality between perceived tourism impacts and subjective wellbeing under the integrative framework of the bottom-up and top-down theories. The bidirectionality signifies that subjective wellbeing should be operationalized by scales following its formative or reflective nature under investigation. Furthermore, the bilateral linkages could be exploited by promoting perceived tourism benefits, mitigating perceived tourism costs and fostering subjective wellbeing in order to uphold residents’ support for tourism for its sustainable development through the social exchange mechanism.