Efforts to confront the challenges of environmental change and uncertainty include attempts to adaptively manage social–ecological systems. However, critical questions remain about whether adaptive management can lead to sustainable outcomes for both ecosystems and society. Here, we make a contribution to these efforts by presenting a 16-y analysis of ecological outcomes and perceived livelihood impacts from adaptive coral reef management in Papua New Guinea. The adaptive management system we studied was a customary rotational fisheries closure system (akin to fallow agriculture), which helped to increase the biomass of reef fish and make fish less wary (more catchable) relative to openly fished areas. However, over time the amount of fish in openly fished reefs slowly declined. We found that, overall, resource users tended to have positive perceptions about this system, but there were negative perceptions when fishing was being prohibited. We also highlight some of the key traits of this adaptive management system, including 1) strong social cohesion, whereby leaders played a critical role in knowledge exchange; 2) high levels of compliance, which was facilitated via a “carrot-and-stick” approach that publicly rewarded good behavior and punished deviant behavior; and 3) high levels of participation by community actors.