This research characterizes nature of vulnerability through a case study of a dryland community in the Elqui River Basin located in North Central Chile. The study is focused on water resources in light climate change and the role of institutions with respect to mitigating community vulnerability through the use of adaptive strategies and capacity. Interviews, focus groups and participant observation were used to gain insights of the community, institutions and stakeholders. Questions were designed to develop an understanding of the problematic conditions (exposures) faced by the community and coping mechanisms (adaptive strategies) in place to deal with the conditions. In addition, secondary sources and research collaboration were essential tools in developing context, validation and determining the likelihood of future exposures and vulnerabilities. The case study highlights that the exposures faced by the community stem from multiple scales and influences. In turn, vulnerability varied between community members and cohorts within the community. Although the community is a dryland area, water-related exposures were not strongly identified; rather social changes were frequently identified. With respect to the role of institutions, their role was greater for agri-business and much weaker for community members