Water management strategy for agriculture in the Vietnamese Mekong Delta (VMD) is undergoing radical changes in response to hydrological changes under the exogenous impacts of climate change, upstream developments, and in-situ water infrastructure development. There have been notable efforts in transitioning to sustainable agricultural development policies, aiming at increasing farmers’ income while protecting the environmental systems of the delta. However, realities suggest that rice famers’ livelihoods remain unstable and highly susceptible to environmental changes. In response to these challenges, farmers have decided to shift their farming practices by transforming from rice-based to more adaptive farming systems. These on-going processes of livelihood transformation raise important questions concerning how local efforts correspond to policymaking and planning toward adaptation. This chapter sheds light on the interface between state-led climate change adaptation and local dynamics of livelihood transformation and how they interact with each other. We first reviewed studies carried out in the VMD, focusing on the adaptation and adaptive capacity of farmers under climate change and environmental impacts. Then we used the data collected from our previous surveys to explore farmers’ perspectives and actions in response to environmental changes. Insights from this chapter contribute to the much-needed knowledge base about how farmers’ livelihoods and adaptive capacity can be enhanced to allow for effective climate change adaptation.