Traditional institutional rules, values, and beliefs help support conservation regimes of natural resources in many indigenous communities. Such traditional conservation regimes may break down as a result of influences from the outside world. This paper examines two cases in Taiwan—the Tao communities on Orchid Island and the Atayal community in Smangus. The former illustrates a process in which traditional institutions supporting local conservation broke
down as a result of external influences, leading to the loss of the local community’s ability to govern the use of a coastal fishery. The latter, in contrast, demonstrates how local people
are able to adapt their traditional institutions to meet the challenges from the outside world while preserving a local forest. The paper concludes by examining factors that affect institutional adaptation in community-based conservation of natural resources.