This research aims to determine the externalities that occur due to the existence of batik business in the Gulurejo Village, Lendah District, Kulon Progo and income multiplier from Gulurejo batik business. Subjects in this research are Gulurejo villagers. In this research, 96 respondents were selected using purposive sampling method. The analytical device was descriptive analysis and multiplier effect analysis. The result of this research were positive and negative externalities that impacted to the batik business in Gulurejo Village. Positive externalities such as: a) generate various types of employment, b) reduce the number of unemploy, c) increase family income. Negative externalities such as: a) water and air pollution due to batik waste, b) social conflicts caused by public protests affected by batik waste, c) the health effects arising from pollution of batik waste. There were also a multiplier effect on a substantial economic impact of 1.39.