AbstractThe need for strengthening adaptive capacity for the vulnerable has been overwhelmingly discussed in the discourse of climate change. This paper examines the roles and constraints of local institutions for increasing adaptive capacity. The role of institutions is analyzed under two broad headings: capacity building and participatory decision making. The constraints of institutions are analyzed based on the ability to learn and act. Participatory assessments were undertaken in the Meghauli and Devchuli Village Development Committees of Nepal to generate data for the assessment. Local government, Civil Society Organisations (CSOs), and social groups were considered for investigation. The findings demonstrate that local government is guided by political influences that contribute to disparity in decision making. The CSOs' role is comparatively satisfactory in capacity building of social groups, but there are questions on coordination and integration with local government. Within institutions, two prime constraints that hinder the ability to learn and act are lack of knowledge and attitude. The paper concludes that the role of local institutions is still very limited in increasing the adaptive capacity of vulnerable people. The scope of their work requires further expansion, backed with technical knowledge, appropriate policies, and effective coordination among all institutions.