Policy makers, donors and practitioners increasingly emphasize community-based adaptation (CBA) as the most viable approach to address climate change risks especially in developing countries. However, there remains limited research on how CBA is working “on the ground” to inform future policy and practice. We examined opportunities and challenges for CBA through multi-sited empirical research on two Australian Aid-funded projects in the Republic of Vanuatu, South Pacific. Greater rainfall variability and intensity, more frequent El Nino-Southern Oscillation events, ocean acidification, and sea level rise are projected for Vanuatu. Both projects worked to address these new or changing climate risks and integrate into current disaster risk reduction initiatives with local communities. Our research indicates that socio-cultural and political factors, such as leadership structures, kinship ties and traditional knowledge, act as both key enablers and barriers to CBA implementation. We expose tensions between community versus external understandings of climate change risks and adaptive capacity, and how particular understandings can undermine local agency. We further highlight scalar politics where powerful, well-connected stakeholders at different scales shape the flow of knowledge, discourses, types of interventions and funding for climate adaptation within communities as well as a significant gap in governance at the sub-national level. Our research also supports previous arguments concerning the need to integrate wider development concerns into CBA. We call for a renewed focus on participatory processes that enable meaningful, multi-stakeholder dialogue and support effective planning, implementation and learning across scales for CBA that is just, transparent and culturally appropriate.