AbstractLocally developed institutions that include rules and regulations, common values and mechanisms of conflict resolution are increasingly regarded as adaptive solutions to resource management problems at the grass-roots level. Since they are rooted in community social capital rather than in external, top-down decision making, they are seen as being dynamic, flexible and responsive to societal and environmental change and, as such, they promote sustainability. Within this context, this chapter examines the case of local institutions for wetland management in western Ethiopia. It discusses how the structure and functioning of these institutions have evolved in response to a changing external environment, and the extent to which this has facilitated the sustainable use of wetlands. It is suggested that these local institutions do play a key role in regulating wetland use, yet they have, uncharacteristically, always relied on external intervention to maintain their local legitimacy. Now there are concerns that the institutional arrangements are breaking down due to a lack of support from local administrative structures and current political ideology. This has major implications for the sustainable use of wetland resources and food security throughout the region.